Crypto lending firm Voyager posted an update on its “restructuring process” and how it will impact its crypto users. Last week, the company filed for bankruptcy following a default on a $650 million loan issued to investment firm Three Arrows Capital (3AC).
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Voyager recently halted withdrawals, deposits, and other operations on its platform. The company is allegedly planning “an efficient path to resume account access and return value to customers”.
The crypto lending platform claims users reassured clients with USD deposits. The company clarified that their deposits are held in a special bank account called For Benefit of Customers (FBO) with the U.S. banking institution Metropolitan Commercial Bank of New York (MCB).
In practice, this means users’ deposits are allegedly protected by the Federal Deposit Insurance Corporation (FDIC). This protects funds of up to $250,000 per Voyager client in the case of bank failure, but not if the crypto lending firm goes bankrupt.
However, Voyager clarified that they don’t hold their clients’ USD deposits. The MCB has been entrusted with this responsibility. Therefore, clients should get their USD funds without further issues once the company completed “a reconciliation and fraud prevention process”.
Crypto users are less lucky as Voyager clarified that they would receive a mix of assets and much of the re-fund process seems to rely on 3AC. The company expects to hold the investment firm accountable and used that money to pay its clients.
Users will receive Voyager tokens, shares, or crypto in a pro-rata or proportionate allocation related to the 3AC recovery, the “newly reorganized company” and other factors which seem far from the control of the company. On the precise amount each user will receive, Voyager said:
At this stage, we are proposing that customers will receive their crypto as described above. However, the exact numbers will depend on what happens in the restructuring process and the recovery of 3AC assets.
On Twitter, Voyager expressed their concerns and their anger about this plan. The majority of the users simply want their funds back as they were before operations were halted and dismissed the idea of being paid in Voyager shares.
In that sense, the company seems willing to negotiate with its users and provide them with an opportunity to vote on the best course of action. Voyager said:
We put together a restructuring plan that would preserve customer assets and provide the best opportunity to maximize value. In addition, the Company is pursuing various strategic alternatives to evaluate the value of the standalone company compared with a third-party investment or sale.
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At the time of writing, the total crypto market cap stands at $888 billion with sideways movement in the past weeks.
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