Borrowing money

Voyager Digital approved $270 million cash refund to customers, rebuffs SBF lowball offer

Investors in collapsed digital asset lender Voyager Digital finally have something to celebrate: A New York court has allowed the lender to repay $270 million held in cash to its customers. Elsewhere, the company rejected a “low offer” from Sam Bankman-Fried’s (SBF) two companies, FTX and Alameda Research.

$270M Refund Approved, But Over $1 Billion Still Under Lockdown

In mid-July, Voyager’s legal team applied to the U.S. Bankruptcy Court for the Southern District of New York for permission to honor customer withdrawals of at least $350 million held at Metropolitan Commercial Bank ( MCB). However, the bank Told The Wall Street Journal that at the time of the bankruptcy filing, the digital asset lender had only $270 million in its accounts.

In its filing, Voyager claimed that it held the money in an account for the benefit of customers (FBO) at MCB. Customers deposited money into this account and reflected it on their Voyager dashboard.

“Restoring access to withdrawals will alleviate customer concerns about accessing their money held in the [Metropolitan Commercial Bank] accounts and platform integrity are restored,” the filing reads.

At a hearing on August 4, Judge Michael Wiles gave the beleaguered lender the go-ahead to repay customers.

“…the Court has approved our proposal to restore access to cash held for the benefit of Voyager customers at the Metropolitan Commercial Bank. We know how important it is to access your money, and with this approval, we will soon begin processing cash withdrawals,” Voyager revealed in a blog post.

The company plans to begin withdrawals on August 11. Customers with USD deposits will receive emails by then with more details on the withdrawal process. Once they have made the withdrawal requests, they can expect to receive their money within 5-10 business days. They can withdraw up to $100,000 via APP/ACH in a 24-hour period.

Voyager still holds over $1 billion in digital assets whose fate has yet to be determined.

While customers with US dollars can access their funds, Voyager continues its bankruptcy proceedings, having filed for Chapter 11 bankruptcy. And as the proceedings continue, dozens of companies are prowling, looking to buy the company at a steep discount. One of those watching Voyager is Sam Bankman-Fried, the “crypto lender of last resort,” but in its latest filing, Voyager rejected the dishonest offer, calling out SBF for the lowball offer.

SBF ‘a lowball offer disguised as a white knight rescue’

In its New York filing, Voyager claimed to have received several offers to buy it in recent months, all higher than those from SBF, which it described as a “low offer disguised as a white knight rescue”.

SBF bid two weeks ago through his two companies, FTX Exchange and Alameda Research, a quantitative trading firm that has been closely tied to Tether. He offered to buy Voyager in cash and offer his customers early cash on their bankrupt claims.

Clients would be able (but not required) to open accounts on the FTX exchange and have an opening cash balance funded by an early distribution on a portion of their bankruptcy claims. They can then withdraw it if they wish or even buy other digital assets on FTX.

However, SBF has made it clear that it will not buy Voyager’s loans from Three Arrows Capital (3AC), the struggling hedge fund whose crash was seen by many as the Lehmann Brothers moment for the digital asset industry. . 3AC owed Voyager more than $650 million before it collapsed.

“The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business – one that allows customers to quickly get cash and recover some of their assets,” SBF said. at the time.

Voyager is not interested in the offer. He stated in his filing that SBF was the lowest offer he had received. In addition, he chastised SBF for violating bankruptcy obligations by releasing details of the offer, presumably to pressure the lender to sell quickly.

SBF and Voyager already have deep ties. Alameda’s $377 million loan from the lender was one of the largest it had issued, second only to 3AC’s $654 million loan. Earlier this year, when Voyager announced financial problems, Alameda loaned it $75 million.

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