Crypto lender Voyager Digital has announced its decision to self-liquidate its assets and close its operations after acquisition deals with FTX and Binance.US fell apart.
Voyager customers will receive a recovery rate of 36% of their cryptocurrency holdings, much lower than the expected rate of 72-73% if the acquisition deals had gone through.
The rate may increase if Alameda Research is unsuccessful in its bid to recover $446 million from Voyager’s estate. Voyager’s lawyers are withholding further funds, including $259.6 million for litigation costs, administrative claims, and other holdbacks.
Voyager customers who have any of the 67 supported tokens on the platform, including Bitcoin and Ether, will be able to withdraw the allowable percentage directly.
However, certain digital assets on the platform that cannot be withdrawn will be liquidated and returned to customers. These include major cryptocurrencies like Algorand, Celo, and Avalanche.
Celsius, another bankrupt crypto platform, has estimated that its creditors will receive 70% of their holdings back, while Voyager customers will receive a meager 36%.
Voyager had been working on returning assets to investors since it first revealed its significant exposure to failed crypto hedge fund Three Arrows Capital last year.
FTX had initially secured approval from a US bankruptcy court to take over Voyager’s assets, which subsequently collapsed. Binance later came into the picture with an offer that valued Voyager at $1 billion, but the exchange pulled out of the deal, citing a “hostile” regulatory climate in the United States.
Regulators like the Securities and Exchange Commission (SEC) and New York’s financial regulator had attempted to halt the deal, claiming it might violate laws on the unregistered offer and sale of securities.
New York’s top financial regulator also said Voyager “illegally operated a virtual currency business within the state without a license.” Voyager’s lawyers have noted that there will be a 10-day objection period after the procedures are filled.