Crypto lender Voyager Digital has announced that it will liquidate its assets and shut down operations, following the failure of deals to sell itself to FTX or Binance.US. In a filing released on Friday, the company’s lawyers stated that customers will now only recover 36% of their crypto holdings, down from the 72-73% estimated recovery rate if the Binance.US acquisition had gone through.
The recovery rate may increase if Alameda Research is unsuccessful in clawing back $446 million from Voyager’s estate. Voyager’s lawyers are also withholding further funds, including $259.6 million for litigation costs, administrative claims, and other holdbacks.
Customers who have any of the 67 supported tokens, including Bitcoin and Ether, stuck on the platform will be able to withdraw the allowable percentage directly. However, a number of digital assets on the platform that cannot be withdrawn will be liquidated and returned to customers, which include major cryptocurrencies like Algorand (ALGO), Celo (CELO), and Avalanche (AVAX).
Voyager mentioned that former customers will receive some form of reimbursement soon. After the procedures are filled, there will be a 10-day objection period. If objections to the plan emerge, the matter will go to a hearing where the court will weigh the arguments. If there are none, Voyager is planning to move quickly with its plan.
The recovery rate for Voyager customers is significantly lower than that of creditors of Celsius, another bankrupt crypto platform, who are estimated to receive 70% of their holdings back. Voyager had been working on how to return assets to its investors since it first revealed its massive exposure to failed crypto hedge fund Three Arrows Capital last year.
Initially, FTX had secured the approval of a US bankruptcy court to take over Voyager’s assets, but it collapsed soon after. The failed crypto lender has stated that it is hopeful that initial distributions will begin within the next few weeks.
