Bankrupt crypto firm Voyager Digital has made progress toward compensating its creditors by securing $484 million through settlements with FTX, Three Arrows Capital (3AC) and Directors and Officers (D&O) insurance claims. This marks a significant milestone in the company’s financial recovery and creditor reimbursement efforts.
In an April 9 filing in the United States Bankruptcy Court for the Southern District of New York, Voyager disclosed that the majority of the reclaimed funds, roughly $450 million, stem from a settlement with FTX.
Voyager filed for Chapter 11 bankruptcy in July 2022 as the crypto market suffered several shocks, 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 parallel lawsuits against former Voyager CEO Stephen Ehrlich for fraudulent statements.
This settlement, including interest, accounts for about 25% of Voyager creditors’ aggregate claims and is anticipated to be disbursed shortly.
In addition to the FTX agreement, Voyager has obtained a claim of approximately $675 million from its ongoing litigation with Three Arrows Capital. Of this amount, $20.43 million represents Voyager’s proportionate share of the initial distribution from 3AC.
The administrator expects additional payments to be disbursed in the coming years as assets are sold off and further litigation settlements are secured. A settlement reached through D&O insurance mediation will also allocate at least $14.35 million to benefit Voyager’s creditors.
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As Voyager progresses through its financial recovery journey, the company faces operational hurdles, including many uncashed checks. Around 270,000 checks totaling $17 million remain uncashed, with the majority valued at less than $25.
Voyager has set a deadline of April 20, after which these uncashed checks will be voided if not claimed.
Voyager is also still dealing with the repercussions of an FTX data breach. An investigation is being conducted to identify the origin and consequences of the breach, which resulted in the compromise of creditor data.
As of May 2023, a restructuring plan proposed having Voyager customers recover 35.7% of their claims in cryptocurrency or cash. The crypto exchange settled with the FTC for $1.65 billion in monetary relief in November 2023.
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