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The US Bankruptcy Court in New York ruled on August 4 that Voyager had provided a “sufficient basis” to support its claim that customers should get access to some of their funds.
A custodial account held at Metropolitan Commercial Bank (MCB) contains at least $270 million in cash that the company disclosed when it filed for bankruptcy. The firm has now been green-lighted to return these funds to its clients, settling one of the more significant issues it has faced, according to the WSJ.
Voyager Digital suspended withdrawals in early July due to bad debts that Three Arrows Capital (3AC) accrued. The firm filed for Chapter 11 bankruptcy on July 5, stating at the time that it had $350 million in cash held in the FBO (For Benefit Of) account for customers at the MCB.
Reprieve for Some
Like many beleaguered crypto brokers and lenders, Voyager faced a bank-run situation as customers rushed to withdraw their funds amid a crashing crypto market.
The firm requested the release of cash held in the bank but stated that the estimated $1.3 billion in crypto assets on the platform belonged to the bankruptcy estate to be shared by all creditors.
Voyager aims to finalize a sale by September and has already rejected offers from FTX boss and crypto billionaire Sam Bankman-Fried. In late July, SBF lashed out at the firm, claiming it still had 75% of its assets and questioning customers had not been reimbursed yet.
A couple of days later, the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) accused Voyager of misleading customers with false claims that it was covered by FDIC insurance.
This week’s fund release approval will offer some reprieve for those that have seen assets frozen by centralized companies during the ongoing crypto winter.
Crypto Markets Sideways
Crypto markets are still range-bound with very little movement in either direction over the past 24 hours. Total capitalization remains at $1.1 trillion, and the major assets are consolidating at current levels.
Bitcoin is flat on the day at a touch over $23,000, whereas Ethereum is trading at $1,664, where it was yesterday.
The only cryptocurrency in the top ten making a move is Binance Coin, with BNB up 4.2% to reach $313 at the time of writing. The company has just announced a partnership with Mastercard to provide prepaid crypto cards in Argentina.