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Customers of Bankrupt Crypto Lender Voyager Could Recover 72% of Their Funds if FTX Sale Is Approved: Report
A judge still needs to approve a bankruptcy payout plan and the company could still scrap the deal in favor of a higher bid.
Updated Oct 20, 2022, 9:06 p.m. Published Oct 20, 2022, 9:22 a.m.
Court documents show customers of bankrupt crypto lending platform Voyager Digital could recover 72% of their investments if a bid by FTX US to buy the lender goes through. But the sale won't close until a judge approves Voyager's payout plan, Bloomberg reported on Wednesday.
The Toronto-based Voyager filed for Chapter 11 bankruptcy protections in the U.S. Southern District Court of New York back in July. At the time, it had around 100,000 creditors and between $1 billion to $10 billion in assets. The bankruptcy filing was followed by a bidding war to buy the embattled lender, which Sam Bankman-Fried's FTX winning the race in September.
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In a letter to the court filed on Oct. 18, Voyager debtors said the sale to FTX US would allow customers to recover around 72% of the value of crypto held in their accounts on the platform, "provides stakeholders with the best possible recovery and facilitates the most expedient resolution" to the bankruptcy proceedings.
During a hearing on Wednesday, U.S. Bankruptcy Court Judge Michael E. Wiles approved an arrangement where Voyager can scrap the FTX deal if a better offer materializes that promises customers a chance to recover more of their funds, the report said. Wiles may consider approving Voyager's bankruptcy payout plan in December – a prerequisite for approving the sale.
The firm also requested Wiles' permission to send its payout plan to customers for a vote, Bloomberg reported. Even if creditors vote in favor, Wiles still has the final say on the sale.
Read more: Voyager Digital's Creditors Push Back Against Plans to Provide Execs With Legal Immunity
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