According to court documents, customers of the defunct crypto lender Voyager Digital may be able to recoup 72% of the value of their accounts.
According to court documents, users of the insolvent cryptocurrency lending platform Voyager Digital might get back 72% of their money if FTX US’s quest to acquire the lender is successful. Bloomberg on Wednesday highlighted that the transaction won’t go through until Voyager’s compensation plan has been approved by a court.
In July, the Toronto-based Voyager petitioned the United States Southern District Court of New York for Chapter 11 bankruptcy protection. At the time, it had anywhere between $1 billion and $10 billion in assets and around 100,000 debtors. After the lender filed for bankruptcy, there was a bidding war to purchase it, with Sam Bankman-FTX Fried’s taking first place in the competition in September.
Voyager debtors claimed in a letter to the court on October 18 that the sale to FTX US “provides stakeholders with the best possible recovery and facilitates the most expedient resolution” to the bankruptcy proceedings. Customers would be able to recover about 72% of the value of the cryptocurrency held in their accounts on the platform.
According to the newspaper, U.S. Bankruptcy Judge Michael E. Wiles authorized a plan that allows Voyager to cancel the FTX contract if a better offer comes in that guarantees clients a chance to recover more of their assets. To approve the transaction, Wiles must first approve Voyager’s bankruptcy payment plan in December.
According to Bloomberg, the company also asked Wiles for authorization to put its compensation proposal to consumers for a vote. Even if creditors approve the transaction, Wiles will still have the last decision.
FTT Token Drops Amidst Rumors
The FTX exchange’s native coin has not responded favorably to the newest development in the ongoing controversy. FTT prices dropped to an intraday low of $22.35 a few hours ago during the Asian trading session, losing 5% over the previous 24 hours.
FTT has lost 9% of its value over the last two weeks, sliding from just over $25 to its current value, adding to the exchange token’s losses. It has also taken a beating, losing 73% since reaching an all-time high of just over $84 in September 2021.
A probe by a Texan securities regulator has made things worse for the firm. Texas State Securities Board enforcement director Joe Rotunda is looking into FTX and its crypto-billionaire owner as a part of the Voyager bankruptcy case. According to the regulator, the business provided Texans with interest-bearing accounts that it views as securities. Rotunda requests that the New York bankruptcy court stops the sale of Voyager to FTX.
When such restrictions are ever implemented in the United States, exchange tokens like FTT, BNB, and HT face the constant possibility of being classified as securities by authorities.