Bankrupt crypto broker Voyager Digital has submitted a plan for customers to recover their assets through Binance US, according to court filings.
The early opt-in period started last week, meaning that Voyager customers can begin sharing data to help Binance US create new or link existing accounts ahead of settling claims. Voyager and Binance US wrote in the filing that they expect the deal to close and payments to begin in March.
But Binance US warned that customers in Hawaii, New York, Texas, and Vermont may have to wait up to six months longer because it can’t create accounts for users in states where it’s not allowed to operate.
“To the extent Binance US does not receive the required licensing and/or authorization to operate in the unsupported states within 6 months from the closing of the asset purchase agreement, Voyager will convert the distributions allocable to such customers to cash and will distribute them separately,” Kirkland & Ellis partner Joshua Sussberg wrote in the court filing.
The rest of Voyager’s U.S.-based customers will need to provide personal details, like their email address, social security number, and date of birth, so a Binance US account can be created on their behalf. A claims portal set up by Voyager also shows users the value of their assets the company filed for bankruptcy, July 5, 2022.
That doesn’t mean customers are getting back 100% of what they’re owed, though.
“Your actual recovery amount will be a percentage of your claim amount, as determined by Voyager’s rebalancing,” a screenshot in the court filing reads.
Last month, Voyager’s Official Committee of Unsecured Creditors elaborated on Twitter, saying that actual recovery will depend on market prices.
“Voyager has a relatively high percentage of altcoins, which have underperformed in the market relative to BTC/ETH and stablecoins,” the creditor committee wrote on Twitter. “These crypto movements are the primary driver of any changes to recovery value.”
For example, the committee wrote that customers would have seen a 51% recovery of their assets using market prices on December 18, 2022. But later clarified that that percentage was “for illustrative purposes” and actual payouts will depend on the market the day the deal closes.
A few months ago, Voyager customers thought they’d be going through a similar payout process with FTX US. But after Sam Bankman-Fried’s sprawling crypto empire filed for Chapter 11 bankruptcy protection in November, Voyager reopened the bidding process on its distressed assets.
“We were shocked, disgruntled, dismayed,” Joshua Sussberg said during a Voyager bankruptcy hearing in November, according to a Bloomberg report. “There will be no transaction with FTX, I think that is quite obvious.”
Voyager Digital filed for bankruptcy in July, with more than 100,000 creditors to whom it owes between $1 and $10 billion. In June, the crypto asset manager revealed that it had a $661 million exposure to now-defunct hedge fund Three Arrows Capital, which itself filed for bankruptcy on July 2.
In September, after turning down what it called a “low-ball bid” from FTX, Voyager Digital accepted a $1.4 billion bid from the company to acquire its distressed assets. But now that FTX itself has filed for bankruptcy, which includes West Realm Shires, the FTX company that won the auction, it can no longer complete the deal.
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