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$270 Million

Bankrupt Crypto Firm Voyager Digital Approved To Release $270 Million In Cash Deposits

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Bankrupt Crypto Firm Voyager Digital Approved To Release $270 Million In Cash Deposits

The now defunct and bankrupt Voyager Digital has been approved by the court to distribute $270 million in funds to creditors and affected customers. The news follows the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board ordering Voyager to remove any statements that allege Voyager is FDIC insured. The U.S. Bankruptcy Court in New York and Judge Michael Wiles have allowed Voyager’s custodian, Metropolitan Commercial bank, to release the $270 million.

New York Bankruptcy Court Approves Release of $270 Million From Voyager’s Custodian

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

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

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Now the presiding bankruptcy court judge, Michael Wiles from New York, has allowed $270 million to be released from Voyager’s custodian Metropolitan Commercial bank (MCB), the Wall Street Journal (WSJ) reported.

MCB explained to the WSJ that it held the $270 million when Voyager filed voluntary petitions for reorganization under Chapter 11. At the end of July, founder and CEO of the crypto exchange FTX, Sam Bankman-Fried, detailed that FTX was offering early liquidity to Voyager customers.

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

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

It is estimated that Voyager will complete the bankruptcy process by the end of September 2022, but there’s allegedly $1.3 billion worth of crypto stemming from 3.5 million customers stored on Voyager’s platform. CNBC reported on August 3, that Voyager’s CEO Steven Ehrlich obtained more than $30 million by selling Voyager equity in February and March 2021.

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While Voyager is a publicly traded firm, last year it adopted an automatic securities disposition plan (ADSP) on December 31, 2021, after Ehrlich’s equity 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.

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$270 Million, ADSP, Bankruptcy Court, bankruptcy process, 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, shares, Steven Ehrlich, Voyager Digital, Voyager shares, Voyager stock

What do you think about the judge in Voyager’s bankruptcy case allowing $270 million to be released from the company’s custodian MCB? What do you think about Ehrlich cashing out Voyager equity amid the stock’s price peak? Let us know your thoughts about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons, Editorial photo credit: mundissima / Shutterstock.com

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

$100K

Voyager To Allow Cash Withdrawals For Customers With US Dollars Held In Accounts

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Voyager To Allow Cash Withdrawals For Customers With US Dollars Held In Accounts

Following the bankruptcy judge approving the release of $270 million in cash deposits, the crypto firm Voyager Digital has announced that it plans to open cash withdrawals starting on Thursday, August 11. After the cash withdrawal gates are open, Voyager customers can withdraw up to $100K in cash via an automated clearing house (ACH) transfer.

Voyager Digital Plans to Open the Withdrawal Gates and Limit Customers to $100K ACH Transfers on August 11

  • Last month, on July 1, Voyager Digital suspended trading, deposits, and withdrawals, and a week later, the company officially filed for bankruptcy protection. Voyager had significant exposure to the now defunct crypto hedge fund Three Arrows Capital (3AC), and 3AC defaulted on a $620 million loan owed to Voyager.
  • On August 4, 2022, the Wall Street Journal reported that Judge Michael Wiles of the U.S. Bankruptcy Court in New York approved the release of $270 million in cash deposits held by Metropolitan Commercial bank (MCB).
  • The following day, Voyager detailed in a blog post that it was updating customers on access to cash, and the next steps of the company’s reorganization process. Voyager plans to open up cash withdrawals next week, and funds will be disbursed to people’s accounts around 5-10 business days later.
  • “We anticipate resuming access to the Voyager app for cash withdrawals only, starting on Thursday, August 11th,” Voyager said on Friday. “Customers with cash (U.S. dollars) in their accounts will receive an email with more details before cash withdrawal access in the app becomes available.”
  • At the same time, Voyager is “simultaneously pursuing a standalone restructuring process and a potential sale of the company.” Bidding for the company begins on August 26 and the sale hearing will be “held on September 8th.”
  • The U.S. Bankruptcy Court in New York is also giving Voyager customers up until October 3, 2022 to file claims against Voyager, which includes claims for cryptocurrency holdings. Voyager has also created an Official Committee of Unsecured Creditors (UCC) last month.
  • “Once cash withdrawals are enabled, customers can request withdrawals of up to $100,000 via ACH in a 24-hour period,” Voyager’s blog post concludes.
Tags in this story

$100K, $100K limit, $270 Million, August 11, Bankruptcy Court, bankruptcy process, Cash Deposits, cash withdrawals, cash withdrawals August 11, Chapter 11 Bankruptcy, Court, Judge Michael Wiles, MCB, Metropolitan Commercial Bank, new york, Steven Ehrlich, US dollar accounts, Voyager Digital

What do you think about Voyager Digital opening up cash withdrawals on August 11? Let us know your thoughts about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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