Voyager Digital has shared an update about its restructuring plan and how it plans to compensate customers who have been affected by recent events. The ability of the platform to return customer assets will depend significantly on the success of its recovery claims against Three Arrows Capital (3AC).
A Long-Awaited Update
After Voyager Digital filed for bankruptcy, the company stated that its recovery plan would be aimed at preserving customer assets. However, the firm did not clarify whether it would be able to return all the funds to the affected users. The company shared a blog post on Monday, stating that it had around $1.3 billion in affected user funds. Additionally, it also has $650 million in claims against Three Arrows Capital (3AC). This $650 million refers to the 15,250 BTC and 350 million USD Coin (USDC) that Three Arrows Capital failed to repay.
The Proposed Recovery Plan
The blog post highlighted the proposed recovery plan, subject to court approval. According to the plan, users could potentially receive Voyager tokens, cryptocurrencies, and common shares in the reorganized organization, along with funds received from proceedings against Three Arrows Capital. The lending firm stated,
“The exact numbers will depend on what happens in the restructuring process and the recovery of 3AC assets,” said the lending firm. The plan is subject to change, negotiation with customers, and ultimately a vote […] We put together a restructuring plan that would preserve customer assets and provide the best opportunity to maximize value.”
Earlier, the company took to Twitter to update customers on the status of their funds and recovery plan.
“We understand how critical it is to get access to the value in your account, and we are working through this process as quickly as possible to do just that. Today’s post provides an update on customer cash and crypto and next steps.”
Crypto Not Guaranteed By FDIC
Voyager Digital had come under scrutiny by the FDIC for marketing customer accounts as FDIC insured, which meant customer funds were safe even if the company failed. Voyager has since updated the terms on its website, clarifying that the insurance does not apply to the collapse of Voyager or “its custodians.” Voyager assured its customers that USD deposits would be returned to customers once a reconciliation and fraud prevention process was completed. The USD is held by the Metropolitan Commercial Bank (MCB) and is insured by the FDIC.
“That means you are covered in the event of MCB’s failure, up to a maximum of $250,000 per Voyager customer,”
While the FDIC insures the USD deposits, crypto is a different matter, with the customer agreement stating that the depositor’s rights to their crypto assets are “unclear” if the company goes insolvent.
Three Arrows Capital Exposure
Voyager also gave an update on its exposure to 3AC, clarifying that it holds around $1.3 billion in crypto assets on the platform, with a further $650 million held in claims against 3AC. 3AC has been declared insolvent, with founders rumored to be untraceable. Voyager has also stressed that the complete return of customer funds is closely tied to the recovery of Three Arrows Capital’s assets.
Voyager Digital is not the only firm that is seeking liquidation funds from Three Arrows Capital, with others such as Deribit also in the picture.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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