Bankrupt Crypto Firm Voyager Digital Approved to Release $270 Million in Cash Deposits – Bitcoin News

Voyager Digital is now in bankruptcy and the court has approved its distribution of $270 Million to creditors and customers. Following the Federal Deposit Insurance Corporation’s (FDIC), and the Federal Reserve Board ordering Voyager, Voyager must remove all statements that claim Voyager is FDIC-insured. The U.S. Bankruptcy Court in New York and Judge Michael Wiles have allowed Voyager’s custodian, Metropolitan Commercial bank, to release the $270 million.

New York Bankruptcy Court Approves Release of $270 Million From Voyager’s Custodian

Voyager Digital, a TSX-listed cryptocurrency exchange (OTCMKTS : VYGVF), revealed that Three Arrows Capital owed $655 million to the company at the end June. Then on July 1, 2022, Voyager suspended trading, deposits, and withdrawals in order to deal with turbulent crypto “market conditions.”

A week later, Voyager filed for bankruptcy protection after citing “prolonged volatility and contagion in the crypto markets.” Voyager shares exchanged hands at the stock’s peak in April 2021 at $29.86 per share, and today’s shares are swapping for $0.34 per unit.

Now the presiding bankruptcy court judge, Michael Wiles from New York, has allowed $270 million to be released from Voyager’s custodian Metropolitan Commercial bank (MCB), the Wall Street Journal (WSJ) reported.

MCB told the WSJ it had $270 million in its possession when Voyager filed Chapter 11 voluntary petitions to reorganize. Sam Bankman Fried, the founder and CEO at FTX crypto exchange, stated that FTX offered early liquidity to Voyager clients.

Voyager was not the only one to file for Chapter 15 bankruptcy protection. Three Arrows Capital (3AC), a crypto lender Celsius, also filed for Chapter 11 bankruptcy. Celsius customers have been very upset about the firm’s downturn, as the company claimed it had roughly 1.7 million customers before it collapsed.

Celsius customers recently asked the bankruptcy judge for funds to be released from the platform. One client said it was an “emergency situation” as he needed his money to “simply to keep a roof over my family and food on their table.”

It is estimated that Voyager will complete the bankruptcy process by the end of September 2022, but there’s allegedly $1.3 billion worth of crypto stemming from 3.5 million customers stored on Voyager’s platform. CNBC reported on August 3, that Voyager’s CEO Steven Ehrlich obtained more than $30 million by selling Voyager equity in February and March 2021.

While Voyager is a publicly traded firm, last year it adopted an automatic securities disposition plan (ADSP) on December 31, 2021, after Ehrlich’s equity sales. CNBC’s Rohan Goswami reports that on January 20, 2022, Voyager’s CEO removed the ADSP structure. Voyager Digital had also a deal signed with the Dallas Mavericks, and established business relations with Genesis Global Capital as well as Galaxy Digital.

This story contains tags
$270,000,000, ADSP. Bankruptcy Court. Chapter 11 Bankruptcy Court. Cash Deposits. Celsius. Celsius Customers. Court. Dallas Mavericks. Court.

What do you think about the judge in Voyager’s bankruptcy case allowing $270 million to be released from the company’s custodian MCB? What do you think about Ehrlich cashing out Voyager equity amid the stock’s price peak? Comment below to share your thoughts.

Jamie Redman

Jamie Redman is the News Lead for News. He also lives in Florida and works as a journalist covering financial technology. Redman joined the cryptocurrency community in 2011 and has been active since then. Since 2011, Redman has been an active member of the cryptocurrency community. Redman is a prolific writer for News, with over 5,700 articles on the most disruptive protocols currently in development.

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