Investors who have kept their assets with Voyager Digital may not get everything they owe. The crypto lending firm has applied for a class 11 bankruptcy on Tuesday. The company expects its customers to be “hampered” by the Chapter 11 process. This means that investors are not paid exactly what they owed.
In a statement, Voyager Digital said customers who have deposited US dollars into their accounts will receive a refund “after a reconciliation and fraud prevention process” is completed with Metropolitan Commercial Bank.
However, in a recent press release, Metropolitan Commercial Bank further clarified the matter. The bank says Voyager customers’ money is insured by the Federal Deposit Insurance Corporation (FDIC)† The standard FDIC insurance coverage is $250,000 per depositor for each account. However, there is a catch. The FDIC insurance only protects against the failure of Metropolitan Commercial Bank. It doesn’t cover Voyager Digital’s failure.
The Metropolitan Commercial Bank maintains an omnibus account on behalf of Voyager Digital customers. The bill only contains US dollars. It has no crypto or digital assets. In addition, the bank has stated that Voyager is solely responsible for maintaining ownership and amount records.
End of the line for Voyager Digital?
Voyager Digital has found itself in quite a predicament. Three arrows capital, another fallen crypto firm, owes Voyager Digital $650 million. In addition, Three Arrows is currently facing liquidation from a court in the British Virgin Islands. Voyager will have to endure this legal battle if it wants to recover from its current position.
Voyager currently has debts in excess of $1 billion.
In addition, Alameda Research is one of the company’s many creditors. The bankruptcy filing lists more than 100,000 creditors. And Sam Bankman-Fried’s Alameda Research is one of them.
In addition, the Toronto Stock Exchange has also delisted the company. The agency made a thorough assessment of the company’s inventories. It found that the company did not meet the minimum listing requirements.