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Monday, March 4, 2024

Voyager Digital to Liquidate its Assets After 2 Failed Purchase Agreements

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Voyager Digital is planning to self-liquidate its assets and shut down operations after failing to secure purchase deals with Binance as well as FTX.US.

The planned FTX-Voyager acquisition failed as a result of the exchange sliding into an abrupt bankruptcy and the subsequent arrest of its chief, Sam Bankman-Fried. However, the collapse of the deal with the American arm of crypto giant Binance was seen as a major blow to the digital asset industry’s efforts to establish itself in the US amid a massive crackdown by the regulators.

Voyager Liquidation

According to a court filing on May 4th, the estimated initial recovery of Voyager’s customers was found to be 35.72%. It also revealed that 38 “unsupported” tokens – such as Tron (TRX), Solana (SOL), Algorand (ALGO), Celo (CELO), and Avalanche (AVAX) – cannot be withdrawn and hence will be liquidated and returned to customers.

On the other hand, those with any of the 67 “supported” assets, such as Bitcoin (BTC) and Ether (ETH), will be able to withdraw the allowable percent of their holdings directly. The initial distributions are expected to begin within the next few weeks.

The deadline for any objection to the liquidation process is May 15th at 4 PM EST, and the responses should be submitted to the US Bankruptcy Court of the Southern District of New York.

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Purchase Deal Failures

Voyager filed for bankruptcy protection in July 2022 after crypto hedge fund Three Arrows Capital (3AC) defaulted on a significant loan position extended by the platform. The company has since been working out how to return assets to investors who used its services.

FTX won the bid to buy its assets in October 2022, a month before its own eventual collapse. Voyager then received an offer from Binance.US, which it described as “the highest and best bid for its assets after a review of strategic options with the core objective of maximizing the value returned to customers and other creditors on an expedited timeframe.”

Binance.US spent months seeking to convince regulators to approve the acquisition but hit several roadblocks, including opposition from the Securities and Exchange Commission (SEC) as well as the Committee on Foreign Investment in the country.

The $1 billion deal came to an end last month after the exchange issued a letter of termination highlighting the hostile regulatory climate. Voyager called the development “disappointing.”

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