Voyager's Plan To Reimburse Customers Is Detailed In Court Documents, But There Is A Catch

Voyager's Plan To Reimburse Customers Is Detailed In Court Documents, But There Is A Catch | best app to buy cryptocurrency

A report on Wednesday cited individuals who said that according to court records filed by the momentarily defunct crypto lender Voyager, the company is not likely to pay back the whole amount owed to customers.

In accordance with the company's Chapter 11 bankruptcy filing, Voyager plans to pay back users using a combination of deposited crypto assets, stock from the company after restructuring, Voyager tokens, and debts recovered from their biggest debtor Three Arrows Capital, which is currently going through the British Virgin Islands' liquidation procedures.

Voyager further adds that consumers with dollar deposits would only be reimbursed via a reconciliation and fraud prevention procedure with Metropolitan Commercial Bank, with which it has an omnibus account.

It is important to note that Voyager did not maintain users' money in individual accounts, but rather combined them into holdings that were tailored to different types of assets. The US SEC has frequently questioned this method of operation.

Even though the firm owed roughly $1.12 billion in debts, the firm now claims to have $1.3 billion in cryptocurrency assets on its platform. (Three Arrows Capital, Sam Bankman-Alameda Fried's Research, and Mike Novogratz's Galaxy Digital are among Voyager's biggest creditors.)

Voyager is one of several cryptocurrency lenders that have scaled back or stopped operating completely as the market for cryptocurrencies continues to decline. It is the first to file for bankruptcy as of this writing, despite indications that Celsius is also considering doing so.

It is worth noting that the bankruptcy procedures for Voyager will shed light on how the courts interpret insolvency legislation in the developing market.