Voyager Digital said it’s working as quickly as possible to open user account access in an update posted on July 11.
The CEO of investment platform BnkToTheFuture, Simon Dixon, commended the communication reassuring for Voyager Digital users.
BnkToTheFuture is an investor in Celsius Network, which also froze user accounts amid challenging market conditions. Due to its poor and infrequent communications, the troubled crypto lending and borrowing platform had been widely criticized for adding to user distress.
When you are distressed and close withdrawals you need to communicate like a public company https://t.co/84DeY0rgwn
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) July 12, 2022
According to Voyager Digital’s update, a company reorganization is in full swing, and users will receive their money back, but not in a single payment and perhaps not in the form it was deposited.
Voyager Digital is restructuring its business
On July 5, Voyager Digital filed for Chapter 11 bankruptcy in the Southern District of New York. This type of bankruptcy enables the company to stay operational while executing a recovery plan.
In an update, the company said users will get their funds back, “subject to a reconciliation and fraud prevention process.”
“Customer cash belongs to you and will go back to you, subject to a reconciliation and fraud prevention process. All customer cash is held in a customer account at Metropolitan Commercial Bank and is equal to the amount of cash in Voyager accounts.“
It added that the USD cash equivalent of customers’ funds is held with Metropolitan Commercial Bank in a “For Benefit of Customers” (FBO) account.
Voyager Digital further disclosed that crypto-assets come in at approximately $1.3 billion, plus a $650 million debt owed by Three Arrows Capital (3AC).
A court filing shows that the whereabouts of 3AC founders Zhu Su and Kyle Livingstone Davies are unknown. It’s also emerged that the pair are not cooperating with authorities regarding the company’s bankruptcy process.
It is unclear whether Voyager Digital can recover the $650 million debtor balance from 3AC.
Pro-rata payments are not popular
Under the restructuring plans, Voyager Digital proposes customer funds be returned through a combination of the below, with users able to choose the proportion of crypto and common equity received, subject to maximum thresholds:
- 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.
The maximum thresholds have not been disclosed at this time, and the plan is subject to court approval.
Social media feedback has been mixed so far, and a common complaint is that the return of funds should not be on a pro-rata basis.
Source: https://cryptoslate.com/voyager-digital-gives-update-on-recovery-plan-reinstating-user-account-access/