The bankruptcy court deciding Voyager’s Chapter 11 case gave its approval for the firm to return up to $270 million to customers.
Judge Michael Wiles, who is presiding over Voyager’s case in the US Bankruptcy Court in New York, gave the green light for Voyager to return customer funds held in a custodial account at Metropolitan Commercial Bank (MCB). That figure currently is $270 million, The Wall Street Journal reported.
Voyager entered Chapter 11 bankruptcy proceedings in early July after halting withdrawals. The lending firm cited a sudden downturn in market conditions leading to the collapse. Chapter 11 bankruptcy protection allows a firm to continue operations as it restructures to pay creditors.
Since then, Voyager has sought to honor customer withdrawals for the funds held by Metropolitan Commercial Bank, which acts as a cash custodian for Voyager. Customers’ cash flows to MCB, which enables Voyager to utilize the funds. Voyager and MCB are permitted to release the cash in the custody account to customers.
At the time of the initial application, court documents showed the amount in the account was about $350 million. MCB told the Journal that Voyager had about $270 million in the account when it filed for bankruptcy.
Though MCB can return the cash to customers, the court has yet to decide what will happen to the more than $1 billion in crypto assets on Voyager’s platform.
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Aislinn Keely joined The Block in the summer of 2019. She is a member of the outlet’s policy team, holding down the legal beat. Before The Block, she lent her voice to the NPR affiliate WFUV, where she reported and anchored newscasts in addition to some podcast work. Aislinn is a proud Fordham Ram and editor-in-chief emerita of its newspaper. When she isn’t writing or reporting, Aislinn is running and rock climbing.