Voyager Digital Nabs $484.35M for Creditor Payback Efforts

Voyager Digital has successfully secured $484.35 million to address creditor repayments following its bankruptcy proceedings.

This development is one of the central approaches the company is taking to find a way out of its financial crisis and ensure that the creditors satisfy some of their demands. The funds, including interest, are due to be paid out to the creditors soon, with the payments being around 25% of their total claims.

Roughly $450 million of the funds have come from the FTX settlement, representing a major leap toward Voyager’s financial recovery. The company filed for Chapter 11 bankruptcy in July 2022 due to a slump in the cryptocurrency market, which caused immense financial pressure.

Legal Settlements and Recovery Efforts

Besides the FTX settlement, Voyager has been participating in several legal actions and settlements aimed at recovering assets for creditor repayments. A significant part of these efforts includes a continuing lawsuit against Three Arrows Capital (3AC), whereby Voyager has received a claim worth about $675 million. Of this figure, $20.43 million is the initial distribution to Voyager, with further payments anticipated as assets are sold and more settlements occur.

In addition, Voyager received a D&O insurance mediation settlement, which will provide for a minimum $14.35 million recovery to the creditors. These developments suggest that Voyager is diligent about getting the most money back to its creditors in difficult circumstances.

Operational Challenges and Data Security Concerns

Voyager is still encountering operational challenges on its way to financial stabilization. One big problem is handling 270,000 uncashed checks worth $17 million, most of which are less than $25. The company has set April 20 as the expiration date for claiming these checks, after which they will be considered out of order.

Part of the company’s challenges stem from a data breach that compromised credit information. Voyager is conducting extensive inquiries, using external cybersecurity professionals, to determine the source and full scope of the breach. Data security is at the top of the company’s mind as it moves forward with its reorganization plans.

As part of its restructuring schemes, Voyager proposed enabling customers to redeem 35.7% of their claims in the form of either cryptocurrency or cash. Further highlighting its efforts to address creditor claims and get out of bankruptcy, the company also sealed a deal with the FTC in November 2023, which required the company to compensate with $1.65 billion in monetary relief.