After a lengthy period of uncertainty, cryptocurrency brokerage Voyager Digital is set to reopen its app, granting customers the long-awaited ability to withdraw their funds. Almost a year after filing for Chapter 11 bankruptcy, the company has made significant strides toward financial recovery. With the Voyager app’s imminent update, customers will finally have visibility into the available withdrawal amounts, offering a glimmer of hope and restoring confidence in the platform.
Voyager App Updated to Display Withdrawal Amounts
Voyager Digital, a prominent cryptocurrency brokerage, is preparing to reopen its app, allowing customers to finally withdraw their funds after nearly one year since filing for Chapter 11 bankruptcy. The bankruptcy plan administrator, Paul Hage, announced in a court filing on June 14 that the Voyager app would be updated by June 15 to reflect the amount available for withdrawal. Hage estimated that the withdrawal period would begin between June 20 and July 5, providing much-awaited relief to Voyager’s customers.
The prolonged wait for withdrawals has been a significant concern for customers who have been unable to access their funds. The update to the Voyager app will allow them to finally see the amount they can withdraw, bringing a sense of transparency and progress to the recovery process.
Initial Distribution Provides 35.72% of Claims
The bankruptcy plan, which received court approval on May 17, outlines the initial distribution of funds to customers. Under this plan, customers will initially receive 35.72% of their claims, either by withdrawing cryptocurrency through the Voyager app or by receiving cash after a 30-day period. This distribution will provide some relief to customers, allowing them to access a significant portion of their funds.
Paul Hage, the bankruptcy plan administrator, highlighted an outstanding debt owed by bankrupt crypto hedge fund Three Arrows Capital to Voyager. With an outstanding balance of $650 million, Three Arrows Capital’s debt poses a significant obstacle to the recovery process. While the initial distribution enables customers to withdraw just over 35% of their funds, the focus will subsequently shift to recovering additional assets that can be distributed to creditors once the initial distribution is completed.
Recovering the remaining debt from Three Arrows Capital will be crucial for the successful completion of the bankruptcy proceedings. The efforts to obtain these funds will play a vital role in further alleviating the financial burden faced by Voyager’s customers.
Pending Resolution May Unlock Additional Funds for Creditors
In addition to the initial distribution, there is a possibility of an extra $445 million in customer funds becoming available to creditors. However, this is contingent upon the resolution of Alameda Research’s preference claim against Voyager. The resolution of this claim, which is not expected until at least mid-September 2023, could potentially unlock substantial funds for distribution among the creditors.
The resolution of the preference claim by Alameda Research holds the key to further recovery for Voyager’s creditors. If the claim is resolved in Voyager’s favor, the additional funds could significantly contribute to addressing the financial liabilities and ensuring a more comprehensive distribution to the creditors.
Voyager Digital, once a thriving cryptocurrency brokerage, encountered financial difficulties that led to its filing for Chapter 11 bankruptcy on July 5. The company faced challenges in finalizing bankruptcy plans, with two previous proposals falling through. The initial plan involving a $1.4 billion deal with FTX US was unsuccessful after FTX also filed for bankruptcy. Subsequently, a $1 billion deal with Binance.US also fell through due to the uncertain regulatory landscape in the United States.
Conclusion
The upcoming reopening of the Voyager app marks a significant milestone for the cryptocurrency brokerage and its customers. After nearly one year since filing for bankruptcy, customers will finally be able to access their funds and initiate the withdrawal process. The bankruptcy plan’s court approval ensures that customers will receive 35.72% of their claims initially, providing some relief amidst the financial challenges they have faced.
