Voyager Digital, a crypto lender, has recently allowed investors to resume withdrawing their funds after almost a year of Chapter 11 bankruptcy filings. According to Dune Analytics, around $250 million has been withdrawn from Voyager since the start of the withdrawals. This shows the immediate effect on investor behaviour.
At the time, Voyager Digital had approximately $176 million of crypto assets, with a Clean Asset ratio of 96.15%. These assets include notable amounts of Bitcoin (2,287.4 BTC), Ethereum (27,363.7 ETH), USDC (18,558,340 USDC), SHIB (2,060 trillion), and other cryptos.
The collapse of the Terra ecosystem had a big impact on Voyager Digital, resulting in the loss of $40 billion of the customers’ funds. Large withdrawals during this period resulted in a liquidity crisis, resulting in Voyager’s bankruptcy. On May 17, Voyager Digital allowed a withdrawal plan, which was approved by the court. Initially, customers are eligible to receive 35.72% of their claims, which they can withdraw as either cryptocurrency through the Voyager app or as cash after a 30-day waiting period. This is to provide some relief to investors while allowing the platform to recover additional assets for later distribution.
Voyager Digital is expecting $650 million from Three Arrows Capital, a bankrupt crypto hedge fund. This will give customers access to slightly more than 35% of their funds, with the intention of recovering additional assets for distribution among creditors once the process is complete. It is estimated that $445 million of customer funds will be available, subject to the resolution of Alameda Research’s preference claim against Voyager, expected by mid-September 2023.
The acquisition of Voyager Digital by Binance for $1 billion was halted due to US government agencies such as the Securities and Exchange Commission and the Department of Justice intervening. This casted uncertainty on Voyager Digital’s future.
The reopening of investor withdrawals brought some relief to those who had their funds restricted for a year. However, the large outflows, asset holdings, ongoing debt claims, and the halted acquisition deal are some of the challenges Voyager Digital will have to address as it tries to recover and rebuild its operations.
