Voyager Digital meets the end of the road, self-liquidate, and shut down

Voyager Digital lawyers have revealed the firm's plan to liquidate its assets and close down operations. The decision comes after the crypto lender failed to secure a purchase deal with either Binance or FTX.US.

Also Read: Voyager's $1B deal with Binance – US moves forward after deal with Feds

Voyager Digital's last resort

The news comes after a May 5 court filing, barely two weeks after Binance.US unexpectedly withdrew from a $1 billion deal to acquire Voyager Digital's assets, following a US government directive to prevent the purchase. Prior to the Binance.US deal, Voyager Digital had also pursued a deal to have FTX acquire its assets, but this, too, fell over as the exchange imploded around November 2022.

From the filing, the platform will send an initial recovery of 36% of individual customers' crypto holdings to their addresses. This percentage is rather small compared to expected recovery rate estimates of between 72 and 73% that they would have received if the acquisition plans had succeeded. It is also compared to creditors' recovery estimates of other cryptocurrency platforms. For instance, Celsius creditors will receive approximately 70% of their holdings.  

Based on the filing, the recovery rate is not fixed- it could rise- if the dysfunctional crypto trading firm Alameda Research's proposal to retrieve $446 million of the estate's holdings for the Alameda case topples.

Besides reserving $446 million of the asset's holdings from Alameda, the crypto lender's legal representatives also extracted an extra $259.6 million to cater to the litigation, administrative claims, and other obstacles.  

Notably, creditors who have any of the 67 tokens that Voyager Digital supports stuck on the platform, like Bitcoin (BTC) and Ethereum (ETH), will be allowed to withdraw some of their holdings directly. As regards those having any of the 38 tokens that are not supported on the platform, like Solana (SOL) and Algorand (ALGO), the crypto lender will liquidate everything and reimburse customers using USD Coin (USDC) stablecoin.

Until then, the US Bankruptcy Court has given around a week for anyone to submit objections to the planned liquidation prices.

Court provides go-ahead signal for eligible Celsius users to withdraw all 'Distributable Custody Assets'

In a different but related story, the court recently allowed Celsius to have some of its users withdraw 100% of their original funds almost a year after the network terminated withdrawals. Based on a May 4 announcement from Celsius, the platform noted that qualified users could access the remaining 6% of distributed custody assets after a court directive.

Notably, before things changed in January, these users had been withdrawing up to 94% of their funds.