On Friday, the legal team representing the bankrupt crypto lender Voyager in the ongoing bankruptcy proceedings announced plans to liquidate assets and sunset its operations. The announcement revealed that FTX and Binance US had cancelled plans to acquire the troubled crypto lender.
A few days ago, the Binance US team failed to close the $1 billion sale plan with Voyager due to regulatory pressure. During the April 25 business engagement between Binance and Voyager, the US regulators interfered with a $1.3 billion sales deal.
Factors Contributing to the Failure of the Voyager Sale Plan
The Binance team confessed that the US’ hostile and uncertain regulatory environment compelled the crypto firm to abandon the Voyager acquisition deal. Reportedly, Voyager was exposed to a liquidity crisis in 2022 after the collapse of the hedge fund Three Arrow (3AC).
Since then, the crypto lender have been pursuing alternative methods to compensate the affected customers.Last year, the now-defunct crypto exchange FTX had expressed interest in acquiring Voyager before Binance’s bid.
It was reported that the FTX team terminated the sale plan last November after submitting Chapter 11 of the Bankruptcy Protection.The collapse of FTX compelled the crypto exchange to join Voyager in seeking for bankruptcy protection in the quest to restore operation.
Notably, Voyager, Celsius,3AC, and FTX, among others, have undergone lengthy court proceedings to compensate their key stakeholders. On the May 5 court filing, the Voyager lawyers observed the locked crypto assets on the lending platform were insufficient for withdrawal.
The lawyers added that the available asset on the Voyager platform included Algorand (ALGO), Avalanche (AVAX) and Celo (CELO).
Voyager Reveals Creditors Repayment Method
After analyzing the available digital assets, the lawyers agreed to refund the customer rather than liquidate their assets. The digital assets will be distributed to Voyager’s affected customers at a recovery rate of 36%.
The digital assets to be returned will include Aave (AAVE), Ethereum (ETH), and 65 other cryptos. Additionally, the Voyager lawyers revealed that the creditors holding 67 of the cryptos mentioned above they would be allowed to withdraw their assets directly.
On the contrary, for the customers owning the 38 crypto assets unavailable on the Voyager platform, the crypto lender will liquidate their assets which will be paid later using USDT.
According to the Voyager’s tweet, the customers are expected to be compensated in the coming days. Besides the proposed refunds, the lawyers witnessed that the Voyager’s current recovery rate was lower than the expected refund rate of 72% if the sale plan was successfully closed.
However, the recovery rate is expected to increase after the court settles the Alameda Research scandal. In January, the Alameda Group filed a new lawsuit against Voyager demanding repayment of $466 million.
The Alameda team claimed that Voyager Capital had requested payments before the loan maturity which was against the lending agreement. Despite the Alameda claims, Voyager still owes the bankruptcy lawyers an amount translating to $259.6 million that was used to cater for the litigation cost.
Elsewhere, the bankrupt crypto lender Celsius announced plans to compensate the customers at a recovery rate of 70%.