Voyager’s Looming Bankruptcy Crypto Sale to FTX: Explained (2024)

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Voyager’s Looming Bankruptcy Crypto Sale to FTX: Explained? ›

Voyager Digital's deal to unload its crypto assets in a $1.4 billion bankruptcy sale to FTX US received initial approval from a New York court this week. Other interested bidders can still make higher offers for the assets.

Further payments are expected to be made in the next few years as assets are sold and litigation recoveries are obtained. All uncashed Voyager checks will be cancelled and deemed unclaimed after Apr. 20, 2024.

Voyager has filed a Chapter 11 bankruptcy petition. According to the company, account holders with cryptocurrencies in their Voyager accounts will receive a combination of cryptos, proceeds from Three Arrows Capital recovery, common shares in a newly reorganised company and VGX tokens.

Voyager, a crypto trading platform founded in 2018, was one of many digital assets firms to go bust and file for Chapter 11 bankruptcy amid a crash in crypto prices in 2022. The exchange gained court approval last May to wind down operations and pay back customers a portion of what they're owed.

After the Voyager bankruptcy process, users either received either ~30% of the same cryptocurrency or 30% of the value of their cryptocurrency in USD. Customers may be taxed differently depending on the nature of the deposit.

The FDIC only offers protection of funds in the event of a bank's failure, not a crypto exchange. For its part, Voyager says it's working through a “reconciliation and fraud prevention process” with its banking partner, after which users will be able to regain access to their cash.

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.

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.

Voyager filed for bankruptcy in July last year, becoming a casualty of a dramatic fall in prices that had shaken the cryptocurrency sector.

If you lose money in crypto, you will have to sell your assets to cover your losses. If crypto goes negative, you will still have to sell your assets to cover your losses.

Who bought out Voyager? ›

Following the bankruptcy of FTX, the US subsidiary of Binance won the bid to buy the assets of Voyager for approximately $1 billion in December 2022.

Earlier this week, Binance.US broke off its $1.3 billion deal to buy crypto broker Voyager Digital's assets due to a “hostile and uncertain regulatory climate.” The announcement comes about nine months after Voyager filed for bankruptcy.

A restructuring plan from May 2023 suggested that Voyager customers could recover 35.7% of their claims in crypto or fiat.

The Commodity Futures Trading Commission has sued Voyager co-founder Stephen Ehrlich, claiming he “fraudulently solicited participation in and operated a digital asset trading and custody platform.” Ehrlich said at the time he was being used as a “scapegoat for the bad actions of others.”

Voyager 1 stopped sending readable science and engineering data back to Earth on Nov. 14, 2023, even though mission controllers could tell the spacecraft was still receiving their commands and otherwise operating normally.

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.

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.