According to reports, insolvent crypto brokerage Voyager Digital Holdings Inc. has been granted permission by a court to begin winding down its operations. During this period, the exchange will return a portion of customers’ crypto held on its platform since last year.
Voyager Digital, once a prominent name in the crypto brokerage industry, filed for bankruptcy, leaving thousands of investors uncertain about the fate of their investments. With an estimated payout of only 35% for affected customers, the collapse of Voyager Digital has sent shockwaves through the crypto community.
The rise and fall of Voyager Digital
Voyager Digital, a pioneering crypto brokerage firm, had enjoyed substantial success in recent years, catering to a growing demand for digital asset trading. With a robust platform and a promise of superior service, Voyager quickly gained a loyal customer base and established itself as a major player in the industry.
However, as the company expanded its operations and navigated the volatile cryptocurrency market, unforeseen challenges began to emerge. In its pursuit of growth, Voyager made strategic decisions that ultimately backfired, leading to severe financial troubles.
Here is how the failure rolled out – poor risk management, inadequate internal controls, and questionable investments put immense strain on the company’s finances, ultimately pushing it towards insolvency. However, the collapse of 3AC put the company completely out of business
Voyager Digital’s bankruptcy announcement and implications
In a devastating blow to investors, Voyager Digital officially filed for bankruptcy, announcing a bleak forecast for its customers. According to the latest reports, the company anticipates a payout of only 35% to affected individuals, leaving many with significant losses and shattered expectations.
The bankruptcy filing has sent shockwaves through the crypto market as investors question the integrity and stability of other crypto-related entities. The incident serves as a stark reminder of the risks associated with investing in an industry still maturing and evolving.
Moreover, Voyager’s collapse raises concerns about the need for stricter regulatory oversight within the crypto sector. As the industry continues to grow, it is vital that regulatory bodies adopt and implement measures to safeguard investor interests and prevent future financial disasters.
The fallout from Voyager’s bankruptcy is likely to have a lasting impact on both individual investors and the broader crypto landscape. Confidence in digital asset investments may be dampened as investors grapple with the uncertainty and skepticism surrounding the industry.
The details of the payout
Wednesday, roughly a month after Binance, Judge Michael Wiles authorized Voyager’s liquidation procedures. The United States terminated an agreement to acquire the cryptocurrency platform after a contract to sell itself to FTX collapsed last year.
According to court documents, Voyager customers will recover approximately 36% of what they are owed, but this amount could increase if the company prevails in a pending dispute with FTX.
Nobody is pleased with the liquidation, said Judge Wiles, addressing Voyager customers who complained about his oversight of the case, the cost of the bankruptcy, the amount paid to attorneys, and the fact that users are receiving only a portion of their cryptocurrency.
Judge Wiles stated that Voyager is pursuing a wind-down because it lacks sufficient funds to completely repay customers. He stated that options that could have resulted in a stronger recovery, such as selling the company to FTX or Binance, did not work out. The judge stated that when Voyager attempted to sell itself to FTX, it was unaware that Sam Bankman-Fried’s company would turn out to be an enormous fraud.
According to a court filing dated May 5, Voyager has approximately $630 million to pay back approximately $1.8 billion in consumer claims. Customers have the option to receive their refund in either cryptocurrency or U.S. dollars.