The U.S. Bankruptcy Court in New York ruled on Aug. 4 that Voyager had provided “sufficient grounds” to support its claim that customers should receive a portion of the funds.
An escrow account held at Metropolitan Commercial Bank (MCB) contained at least $270 million in cash the company disclosed when it filed for bankruptcy. The company has now been given the go-ahead to return those funds to customers, solving one of its more important problems. Wall Street Journal.
Voyager Digital suspended withdrawals in early July due to bad debts accumulated by Three Arrows Capital (3AC). The company, which filed for Chapter 11 bankruptcy protection on July 5, said at the time that it held $350 million in cash in the FBO (For Benefit Of) accounts of MCB customers.
Like many beleaguered cryptocurrency brokers and lenders, Voyager faces a bank-run situation as customers rush to withdraw funds amid a collapse in the cryptocurrency market.
The company demanded the release of cash held by banks, but said the estimated $1.3 billion in crypto assets on the platform belonged to the bankruptcy estate, shared by all creditors.
Voyager aims to close the sale by September, and has already rejected an offer from FTX boss and cryptocurrency billionaire Sam Bankman-Fried. In late July, the SBF lashed out at the company, claiming it still had 75% of its assets and questioning customers had yet to be reimbursed.
Days later, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) accused Voyager of misleading customers by falsely claiming that it was covered by FDIC insurance.
This week’s fund offering approval will provide some reprieve for those who have seen their assets frozen by centralized companies amid the ongoing crypto winter.
Crypto markets move sideways
The cryptocurrency market remains range-bound over the past 24 hours, with very little movement in either direction. Total capital remains at $1.1 trillion and major assets are consolidating to current levels.
Bitcoin was flat on the day above $23,000, while Ethereum was trading at $1,664, the same as yesterday.
The only cryptocurrency in the top ten is Binance Coin, with BNB up 4.2% to $313 at the time of writing. The company just announced a partnership with Mastercard to offer prepaid crypto cards in Argentina.
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