Voyager creditors to recover 36 cents per dollar of assets

Creditors in bankruptcy proceedings Voyager Digital will be able to recover 36% of asset value. Such estimates derive fromfilings by the crypto broker for the court.

That figure is actually roughly half of the 72–73% anticipated under the deal with FTX or Binance.US. On 25 April 2023, the latter withdrew its filing, citing a ‘hostile and uncertain regulatory climate in the United States’.

On 4 May Voyager Digital announced that it was preparing for liquidation and payments to creditors ‘within a few weeks’. Payments are planned in fiat and digital assets.

The court filing indicates that the recovery rate could rise from 36% should Alameda Research fail to recover $445 million from the broker’s assets.

Voyager’s lawyers have also reserved $259.6 million for legal costs, administrative claims and other holdbacks.

The move to liquidation is provided for in the court-approved bankruptcy restructuring plan. The parties will have ten days to object to the filing after its submission.

In December 2022, Binance.US offered the highest price for Voyager’s assets — $1.02 billion.

Yet regulators, including the U.S. Securities and Exchange Commission (SEC) and New York State Department of Financial Services (NYDFS), opposed the deal.

During the hearings on the case, SEC representatives said that Binance’s U.S. unit runs an unregistered securities exchange. The U.S. Department of Justice also opposed.

U.S. Attorney Damian Williams noted that the agreement between the companies effectively rehabilitates Voyager and its employees after violations of the Securities Act.

On 17 March 2023, the U.S. Department of Justice filed for an emergency freeze on the deal. Three days later, Voyager Digital challenged the motion, but a day later the agency filed a counter-appeal. On 28 March, the court halted the asset sale. On 19 April, authorities agreed with the creditors’ committee’s arguments, withdrawing their objections, withdrew their objections.

In March, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its CEO Changpeng Zhao. The regulator alleged the crypto exchange engaged in willful evasion of U.S. securities laws and non-compliance with rules.

In response Zhao said the CFTC’s allegations contain ‘an incomplete account of the facts’, and his company does not agree with many of its points.