Voyager Digital, a bankrupt cryptocurrency company, is authorized to release $270 million in cash deposits.

The court has authorized the now-defunct and insolvent Voyager Digital to transfer $270 million to creditors and impacted consumers. The announcement comes after the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) ordered Voyager to take down any claims that the company is FDIC-insured. The $270 million has been released to Metropolitan Commercial Bank, Voyager’s custodian, by Judge Michael Wiles of the U.S. Bankruptcy Court in New York.

Voyager’s Custodian to Release $270 Million, Per New York Bankruptcy Court
The hedge fund Three Arrows Capital owes the cryptocurrency exchange Voyager Digital (OTCMKTS: VYGVF), which is listed on the TSX, $655 million, according to information released at the end of June. In response to tumultuous crypto “market circumstances,” Voyager then decided to cease trading, deposits, and withdrawals on July 1, 2022.

Following a week, Voyager announced that company has filed for bankruptcy, blaming “prolonged volatility and contagion in the crypto markets.” At the pinnacle of the stock’s price in April 2021, Voyager shares were traded for $29.86 each, while today’s shares are worth $0.34.

The Metropolitan Commercial Bank (MCB), which served as Voyager’s custodian, has now been permitted to discharge $270 million, according to the Wall Street Journal (WSJ). Michael Wiles, the sitting bankruptcy court judge, is from New York.

The $270 million was held by MCB, according to the WSJ, when Voyager submitted voluntary filings for Chapter 11 restructuring. Sam Bankman-Fried, the founder and CEO of the cryptocurrency exchange FTX, said that FTX was providing early liquidity to Voyager clients at the end of July.

Along with Voyager, Three Arrows Capital (3AC) and the cryptocurrency lender Celsius also filed for bankruptcy under Chapters 11 and 15. Customers of Celsius have expressed great dissatisfaction about the business’s decline, since the company claimed it had 1.7 million clients when it shut down.

Customers of Celsius recently begged the bankruptcy court to release money that was being kept on the platform. One customer described the situation as “urgent,” as he required the money “just to have a roof over my family and food on their table.”

The bankruptcy procedure for Voyager is anticipated to be finished by the end of September 2022, although the platform of Voyager is said to have 3.5 million clients who have deposited crypto valued at $1.3 billion. According to a CNBC story on August 3, the CEO of Voyager, Steven Ehrlich, made almost $30 million by selling Voyager ownership in the months of February and March 2021.

Voyager, a publicly listed company, implemented an automated securities disposal plan (ADSP) last year, which will take effect following Ehrlich’s stock sales on December 31, 2021. According to Rohan Goswami of CNBC, the CEO of Voyager eliminated the ADSP structure on January 20, 2022. In addition, Voyager Digital has financial ties to Genesis Global Capital, Galaxy Digital, and the Dallas Mavericks.

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