Bankruptcy Judge Approves $450M Settlement Between FTX and Voyager Digital
Summary:
U.S. Bankruptcy Judge John Dorsey has approved a $450 million settlement deal between bankrupt company Voyager Digital and the defunct cryptocurrency exchange FTX. The agreement will enable Voyager to resolve all pending claims with FTX as part of its effort to reimburse creditors. The settlement paves the way for the release of $5 million held in escrow by Voyager and an additional $445 million from an Alameda Research loan lawsuit to Voyager's debtors. FTX, in return, will renounce any claim to these funds.
U.S. Bankruptcy Judge, John Dorsey, has given the green light on the proposed $450 million settlement deal between failed crypto trading platform FTX and Voyager Digital, a firm currently in bankruptcy. As indicated in court documents filed on April 29 in the District of Delaware, under this settlement, Voyager will be able to resolve all outstanding issues with FTX, thereby providing a way to reimburse its creditors. After receiving necessary approvals, $5 million currently held by Voyager in escrow, along with a further $445 million tied up in an Alameda Research loan litigation, will be freed up for disbursement among Voyager's debtors. FTX has consented to renounce any ownership rights to these funds. Voyager Digital was represented by attorney Paul Hage in the deal which was agreed upon and signed off by both John Ray III, FTX's restructuring officer and CEO as well as Paul Hage on April 4. Since declaring bankruptcy in July 2022 during a downturn in the cryptocurrency market, Voyager has been trying to secure several such settlements. Last April brought news of Voyager securing around $20 million from Three Arrows Capital and about $14 million from its Directors and Officers Insurance to put towards its customer reimbursements. A suggestion put forth in Voyager's May 2023 restructuring plan hinted that customers might be able to retrieve around 35.7% of their claims in either crypto or fiat currencies. Voyager's ex-CEO, Stephen Ehrlich, came under the scanner of both the U.S. Commodity Futures Trading Commission and the Federal Trade Commission in October 2023. The agencies launched concurrent lawsuits against Ehrlich, accusing him of deceptive practices. The cases were all pending as of the time this article was written.
Published At
4/29/2024 10:45:00 PM
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