Voyager Digital takes a big step forward in repaying creditors

In a recent development, Voyager Digital, a prominent player in the crypto space, announced that it has secured $484.35 million to compensate creditors. This is the result of settlements with FTX, Three Arrows Capital (3AC), and insurance claims against directors and officers, following the company’s bankruptcy. This milestone underlines Voyager’s progress in its pursuit of financial recovery and repaying its creditors.

A large part stems from the settlement with FTX

The majority of these funds, approximately $450 million, come from the settlement with FTX. This development follows Voyager’s bankruptcy in July 2022, amid instability in the crypto market.

In a statement to the United States Bankruptcy Court for the Southern District of New York, Voyager revealed that this settlement, including interest, covers approximately 25% of creditors’ total claims. It is expected that these payments will be made soon.

In addition, Voyager has obtained a $675 million claim from an ongoing lawsuit against Three Arrows Capital, of which $20.43 million will be awarded directly to Voyager’s creditors. Further payments are expected as assets are sold and additional litigation is completed.

Another important step in the recovery process is a settlement reached through D&O insurance, which will award at least $14.35 million to creditors.

Still many operational challenges

Despite this progress, Voyager faces operational challenges, including managing approximately 270,000 uncashed checks, totaling $17 million. These checks will be voided after April 20 if not claimed.

The company is also still dealing with the aftermath of a data breach. An investigation is currently underway into the origins and consequences of the breach that compromised creditor data.

As part of a restructuring plan proposed in May 2023, Voyager customers could start recovering 35.7% of their claims in cryptocurrency or cash. This followed a $1.65 billion settlement with the FTC in November 2023, intended to provide financial relief to those affected.