Bankrupt crypto firm Voyager Digital approved release of $270 million in cash deposits – Bitcoin News – Bitcoin News | Vette Leader

The now-defunct and bankrupt Voyager Digital has been authorized by the court to distribute $270 million in funds to creditors and affected customers. The news follows the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve Board directing Voyager to remove any statements claiming that Voyager is FDIC-insured. The US bankruptcy court in New York and Judge Michael Wiles have allowed Voyager’s trustee, the Metropolitan Commercial Bank, to release the $270 million.

New York bankruptcy court approves release of $270 million from Voyager’s custodian

TSX-listed crypto exchange Voyager Digital (OTCMKTS: VYGVF) announced in late June that hedge fund Three Arrows Capital owed the company $655 million. Then, on July 1, 2022, Voyager suspended trading, deposits, and withdrawals to cope with turbulent crypto “market conditions.”

A week later, Voyager filed for bankruptcy protection after citing “continued volatility and contagion in crypto markets.” Voyager shares were trading at $29.86 per share at the stock’s peak in April 2021 and today’s shares are trading at $0.34 per unit.

Now, New York’s presiding bankruptcy court judge, Michael Wiles, has authorized the release of $270 million from Voyager’s custodian Metropolitan Commercial Bank (MCB), the Wall Street Journal (WSJ) reported.

MCB told the WSJ that it held the $270 million when Voyager filed voluntary Chapter 11 reorganization requests. In late July, crypto exchange FTX founder and CEO Sam Bankman-Fried stated that FTX was offering early liquidity to Voyager clients.

In addition to Voyager, Three Arrows Capital (3AC) has filed for Chapter 15 bankruptcy protection and crypto lender Celsius has filed for Chapter 11 bankruptcy. Celsius’ customers were very upset about the company’s downturn, as the company claimed to have had around 1.7 million customers before the collapse.

Celsius customers recently asked the bankruptcy judge to release funds held on the platform. One customer said it was an “emergency situation” as he needed his money to “just keep a roof over my family and food on their table”.

It is estimated that Voyager will complete bankruptcy proceedings by the end of September 2022, but Voyager’s platform is said to have $1.3 billion worth of crypto from 3.5 million customers stored on it. CNBC reported on Aug. 3 that Voyager CEO Steven Ehrlich received more than $30 million through the sale of Voyager stock in February and March 2021.

Although Voyager is a publicly traded company, it implemented an Automated Stock Disposition Plan (ADSP) last year following Ehrlich’s December 31, 2021 stock sales. CNBC’s Rohan Goswami reports that on January 20, 2022, Voyager’s CEO removed the ADSP structure. Voyager Digital also had a deal with the Dallas Mavericks and business relationships with Genesis Global Capital and Galaxy Digital.

tags in this story

$270M, ADSP, Bankruptcy Court, Bankruptcy Proceedings, Cash Deposits, Celsius, Celsius Customers, Chapter 11 Bankruptcy, Court, Dallas Mavericks, Galaxy Digital, Genesis Global Capital, Judge Michael Wiles, Judge Micheal Wiles, MCB, Metropolitan Commercial Bank , Micheal Wiles, New York, Stocks, Steven Ehrlich, Voyager Digital, Voyager Stocks, Voyager Stocks

What do you think of the Voyager bankruptcy judge allowing $270 million to be released from the company’s custodian, MCB? What do you think of Ehrlich paying off Voyager equity amid the stock’s peak price? Do let us know your thoughts on this topic in the comments section below.

Jamie Redman

Jamie Redman is the news director at News and a Florida-based financial technology journalist. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for bitcoin, open source code and decentralized applications. As of September 2015, Redman has written more than 5,700 articles for News about today’s emerging disruptive protocols.

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