Voyager Digital, the bankrupt cryptocurrency firm, has made significant progress in compensating its creditors by securing $484 million through settlements with FTX, Three Arrows Capital (3AC), and Directors and Officers (D&O) insurance claims. This achievement marks a major milestone in the company’s financial recovery and efforts to reimburse its creditors.
According to a filing made on April 9 in the United States Bankruptcy Court for the Southern District of New York, Voyager revealed that the majority of the reclaimed funds, approximately $450 million, came from a settlement with FTX. Voyager filed for Chapter 11 bankruptcy in July 2022, following various shocks in the crypto market, including the collapse of the Terra ecosystem in May.
In October 2023, the U.S. Commodity Futures Trading Commission and the Federal Trade Commission (FTC) filed separate lawsuits against former Voyager CEO Stephen Ehrlich, accusing him of making fraudulent statements. The recent settlement with FTX, including interest, covers around 25% of Voyager’s creditors’ total claims and is expected to be paid out soon.
Apart from the FTX agreement, Voyager has also obtained a claim of approximately $675 million from its ongoing litigation with Three Arrows Capital. Out of this amount, Voyager’s share of the initial distribution from 3AC is $20.43 million. The administrator anticipates further payments to be made in the coming years as assets are sold and additional litigation settlements are reached. Moreover, a settlement reached through D&O insurance mediation will allocate at least $14.35 million to benefit Voyager’s creditors.
As Voyager continues its journey towards financial recovery, the company is facing operational challenges, including a large number of uncashed checks. Currently, there are about 270,000 uncashed checks totaling $17 million, with the majority valued at less than $25. To address this issue, Voyager has set a deadline of April 20, after which these uncashed checks will be voided if not claimed.
Furthermore, Voyager is still dealing with the consequences of a data breach that occurred at FTX. An ongoing investigation is underway to determine the source and impact of the breach, which led to the compromise of creditor data.
In May 2023, a restructuring plan was proposed, suggesting that Voyager customers would be able to recover 35.7% of their claims in either cryptocurrency or cash. Additionally, in November 2023, the crypto exchange settled with the FTC for $1.65 billion in monetary relief.
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