Voyager Digital, a cryptocurrency trading platform, has announced plans to liquidate its assets and shut down operations after failing to secure purchase deals with two major players in the industry, Binance, and FTX.US.
The planned acquisition of Voyager by FTX.US was derailed by the sudden bankruptcy of the exchange, as well as the arrest of its CEO, Sam Bankman-Fried. Meanwhile, the deal with Binance.US fell through after the exchange faced regulatory opposition from the Securities and Exchange Commission (SEC) and the Committee on Foreign Investment in the United States.
Consequences for Customers
As a result of the liquidation process, customers of Voyager Digital will only be able to recover an estimated 35.72% of their assets. Additionally, 38 “unsupported” tokens, such as Tron, Solana, Algorand, Celo, and Avalanche, cannot be withdrawn and will instead be liquidated and returned to customers. Those holding any of the 67 “supported” assets, such as Bitcoin and Ether, will be able to withdraw the allowable percentage of their holdings directly. The initial distributions are expected to begin in the coming weeks.
The deadline for any objection to the liquidation process is May 15th at 4 PM EST, with responses required to be submitted to the US Bankruptcy Court of the Southern District of New York.
Failed Purchase Deals and Bankruptcy Protection
Voyager filed for bankruptcy protection in July 2022 after crypto hedge fund Three Arrows Capital (3AC) defaulted on a significant loan position extended by the platform. The company has since been working to return assets to investors who used its services. FTX.US won the bid to buy its assets in October 2022, a month before its eventual collapse. Voyager then received an offer from Binance.US, which it described as the highest and best bid for its assets after a review of strategic options with the core objective of maximizing the value returned to customers and other creditors on an expedited timeframe.
The collapse of the deal with Binance.US is seen as a significant setback to the digital asset industry’s efforts to establish itself in the US amid a massive regulatory crackdown. Binance.US had spent months trying to convince regulators to approve the acquisition but faced opposition from the SEC and the Committee on Foreign Investment in the United States.