Bankrupt crypto lenderVoyager Digital Holdingshas reported a possible breach, revealing the difficulties of protecting customers from online scammers.
The firm’s lawyer, Darren Azman, reported the possible breach during a U.S. Bankruptcy Court hearing, Bloomberg reportedTuesday (Aug. 1). The potential breach occurred as the company was allowing customers to recover their money as part of its court-supervised liquidation process.
Responding to the news that the platform may have been hacked just as it reopened, Judge Michael Wiles said, “It’s disgraceful. I don’t know what to say. After everything these folks have been through.”
The breach has been reported to law enforcement and is being investigated by the bankruptcy officials who are overseeing the wind down of Voyager Digital Holdings, according to the report.
Voyager’s lawyer said the firm’s customers have been relentlessly targeted with various scams, including one where they are asked to link their non-Voyager crypto wallets to a new account with the pretense of an increased payout, per the report. In reality, these wallets are then reported to be quickly drained.
Only a few customers have fallen for those scams, Azman said, according to the report.
Voyager said in a May 5 court filing that it wasclosing downfollowing two failed attempts to sell itself.
The announcement came 10 days after Binance.US walked away from a plan to purchase Voyager for $1 billion, giving no reason for its decision when announcing its termination of the deal.
Voyager originally filed for Chapter 11 bankruptcy protection in July 2022, saying in a filing before the bankruptcy court that it was “facing a short-term ‘run on the bank’” after a borrower defaulted on a $650 million loan.
Two months later, in September 2022, crypto exchange FTX won an initial auction for Voyager’s assets, only to declare bankruptcy itself two months later.
The cryptocurrency sector’s woes have long included hacksfrom bad actors. In 2022, hackers stole $3.8 billion from crypto companies, according to blockchain intelligence platformChainalysis.
That total was up from the $3.3 billion stolen in hacks in 2021 and made 2022 the biggest year in the cryptocurrency sector’s decade-plus history for losses stemming from hacks, according to Chainalysis’ crypto crime report.
See More In: bankruptcy, breach, crypto firm, cryptocurrency, Darren Azman, hacked, liquidation process, News, online scammers, PYMNTS News, scams, Voyager Digital, What's Hot
FAQs
From June 23, 2023, you will have 30 days to complete your withdrawal. If you don't transfer your crypto in this timeframe, you'll receive your initial recovery in U.S. dollars later, subject to market fluctuations.
Are people suing Voyager? ›
The New Jersey-based law firm gave a “bogus legal opinion” that Voyager's native VGX token was not an unregistered security, investors allege in a lawsuit filed Feb. 6 in Miami. The opinion played an integral role in a fraud that led to over $4 billion in investor losses, the suit claims.
What is going on with Voyager Digital? ›
The Federal Trade Commission announced a settlement with bankrupt crypto company Voyager that will permanently ban it from handling consumers' assets and is filing suit against its former CEO, Stephen Ehrlich, for falsely claiming that customers' accounts were insured by the Federal Deposit Insurance Corporation (FDIC) ...
What will happen to my money in Voyager? ›
Voyager intends to repay customers with the same type of cryptocurrency they had in their accounts. For deposits held in unsupported cryptocurrencies that cannot be withdrawn from Voyager's platform and for Voyager's proprietary VGX token, Voyager will instead repay customers using the stablecoin USDC.
How much will Voyager creditors get back? ›
As of May 2023, a restructuring plan proposed having Voyager customers recover 35.7% of their claims in cryptocurrency or cash. The crypto exchange settled with the FTC for $1.65 billion in monetary relief in November 2023.
Does Voyager report crypto to IRS? ›
Yes. In the United States, cryptocurrency — on Voyager and other platforms — is subject to income and capital gains tax. This applies to transactions made before the Voyager bankruptcy filing. For more information, check out our complete guide to cryptocurrency taxes.
Why did Voyager get Cancelled? ›
Why Star Trek: Voyager Ended (Was It Canceled?) Star Trek: Voyager's season 7 ending was pre-planned, following the tradition set by previous franchise series. The show's important characters, like Captain Janeway and Seven of Nine, continue to be relevant in recent Star Trek projects, such as Prodigy and Picard.
Did Voyager send out checks? ›
Completing the Chapter 11 plan that the bankruptcy court approved in March 2023, Voyager issued approximately 627,000 checks worth $131 million for the initial distribution to creditors. So far, only 353,000 of the checks, with an aggregate value of $112 million, have been deposited.
How to sue Voyager digitally? ›
If you invested with Voyager Digital and were adversely affected, you might be eligible to join or file a class action claim. Contact us today at 305-740-1423 for a FREE CASE REVIEW with one of our experienced attorneys.
When did Voyager freeze accounts? ›
Voyager users have been unable to access their cryptocurrencies since July 1, when the meltdown in digital assets forced the company to suspend trading, deposits and withdrawals.
Go to your Coinbase account, navigate to the corresponding wallet, and click on “Receive” or “Deposit.” This will provide you with a unique wallet address for the selected cryptocurrency. Back in your Voyager account, look for the “Withdraw” or “Send” option for the chosen cryptocurrency.
Is my money in Voyager safe? ›
Unlike traditional banks, cryptocurrency platforms like Voyager are not covered by the Federal Deposit Insurance Corporation (FDIC). This typically means that if the platform goes bankrupt, customers may lose their digital assets.
Is money in Voyager insured? ›
USD held with Voyager is FDIC insured up to $250K. Our customers' security is our top priority.” The FTC says Voyager doubled down on those representations in correspondence with consumers.
How much does Voyager owe customers? ›
Voyager has about $630 million to repay around $1.8 billion in customer claims, according to a May 5 court filing. Customers have the option of taking their repayment in crypto or U.S. dollars.
How to join a class action lawsuit against Voyager? ›
If you were a Voyager Digital customer and suffered due to the actions of the company and/or it's partners, contact us now at 305-740-1423 or complete the form below for a FREE CASE REVIEW.
