Customers May Not Get Full Crypto Refund

Troubled cryptocurrency brokerage company Voyager Digital has revealed that its customers may not be able to receive all their entire crypto assets as the firm moves forward with its reorganization plans. 

Last Friday, Voyager commenced a voluntary Chapter 11 bankruptcy process to establish an efficient plan to unfreeze users’ accounts and funds. The company had earlier frozen customers’ assets by suspending all trading activities, including withdrawals, deposits, and loyalty rewards, due to financial issues that stemmed from extreme market volatility and a loan to crypto hedge fund Three Arrows Capital (3AC).

Users’ Crypto Assets Not Insured

The beleaguered brokerage firm noted that under the restructuring plan, which is subjected to change and requires court authorization before implementation, users will receive a portion of their assets in the following order: Pro-rata share of crypto, pro-rata share of proceeds from the 3AC recovery, pro-rata share of common shares in the newly reorganized company, and pro-rata share of existing Voyager tokens.

However, Voyager noted that the exact amount of crypto assets that users will receive highly depends on the restructuring plan and recovery of its funds from 3AC. 

The company also revealed that it is working to restore cash withdrawals. According to the firm, customers’ USD deposits are stored at the Metropolitan Commercial Bank of New York, which is FDIC insured. The crypto broker noted that users will be able to access their USD deposits after a reconciliation and fraud prevention process.

Voyager Currently Has $1.3 Billion Worth of Assets.

The American-based crypto platform said that it has approximately $1.3 billion in digital assets, including claims against 3AC of more than $650 million. 

Voyager revealed in June that it had about $660 million exposure to 3AC, consisting of $350 million worth of USDC stablecoin and 15,250 BTC worth approximately $311.8 million. 

During the peak market downturn that negatively affected 3AC, Voyager requested that the firm repay its loans in which the VC failed to meet the demand. The crypto broker had to issue a notice of default to the hedge fund. Voyager said it would continue to fight to retrieve the funds from the troubled company.