Voyager Digital Bounces Back Post-Bankruptcy, Secures $484.35M in Settlements
Summary:
Post-insolvency, Voyager Digital has managed to secure an impressive $484.35 million through settlements with FTX, Three Arrows Capital, and via Directors and Officers insurance claims. This recovery achievement is part of the company's consistent efforts to compensate its creditors after filing for Chapter 11 bankruptcy in 2022. However, the company still faces operational challenges such as a large volume of uncashed checks and ongoing investigations into a data breach. The crypto exchange also managed to settle a case with the FTC for $1.65 billion in November 2023.
In a considerable move forward post-insolvency, Voyager Digital has managed to amass $484.35 million by settling claims with FTX, Three Arrows Capital, and through Directors and Officers insurance. Marking a momentous phase in their financial recuperation and efforts to compensate creditors, Voyager Digital's advancement ties in well with their post-insolvency plan. Voyager Digital presented a detailed account of their asset resurgence and creditor reimbursement post-financial downfall to the US Bankruptcy Court for the Southern District of New York. The document reveals that the lion's share of the recovered funds, about $450 million, springs from the settlement with FTX. The cryptocurrency industry began to wane when Voyager filed for Chapter 11 bankruptcy in July 2022. The United States Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC) lodged harmonized lawsuits against ex-Voyager CEO Stephen Ehrlich for deceptive statements in October 2023. This settlement, factoring in interest, meets roughly 25% of Voyager’s aggregate claims from creditors and distribution is expected soon. Alongside the FTX accord, Voyager has secured a claim worth nearly $675 million from ongoing litigation with Three Arrows Capital. This sum includes Voyager’s $20.43 million cut from Three Arrows Capital's preliminary distribution. The administrator is hopeful about future payment disbursements as assets get sold and more litigation settlements get nailed down. A settlement resulting from the Directors and Officers insurance mediation is also set to allocate no less than $14.35 million for Voyager’s creditors. As Voyager's financial recovery continues to unfold, it faces several operational obstacles. Chief among them is a significant volume of uncashed checks, which totals 270,000 checks amounting to $17 million. Most checks are valued less than $25. These will be voided after April 20 if they remain uncashed. Voyager is still grappling with the aftermath of a data breach. A thorough investigation is underway, with the help of external specialist experts, to determine the breach's source and full impact, that led to the compromise of creditors' data. Voyager customers were proposed to reclaim 35.7% of their claims in cryptocurrency or cash in a restructuring plan in May 2023. The cryptocurrency exchange reached a settlement with the FTC for $1.65 billion as financial relief in November 2023.
Published At
4/11/2024 10:36:44 AM
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