The financial complications and crypto market crash caused several problems for crypto firms and organizations. Crypto brokerage Voyager Digital also filed for bankruptcy amid similar circumstances. In a recent development, the US Bankruptcy Court in New York ruled on August 4 that Voyager provided a sufficient basis to support its claim of returning funds.
As per the latest reports, a custodial account at Metropolitan Commercial Bank (MCB) has almost $270 million in cash. Voyager disclosed these assets when it filed for bankruptcy a few weeks ago. Therefore, the company is now given a go-ahead to return funds to its customers. This was one of the most prominent issues faced by the firm. But it will now be solved.
Voyager Clients Are Relieved Amid Latest Developments
Earlier in July, Voyager suspended its withdrawals due to debts of Three Arrows Capital (3AC). As a result, the firm filed for Chapter 11 bankruptcy. At that time, the firm said that it has around $350 million in cash in the FBO account for customers at the MCB.
However, as soon as the announcement was made, customers went to withdraw their funds at a fast pace. The crashing crypto market was a major reason for these circumstances. Moreover, Voyager requested the release of cash it had in the bank. It also added that it held $1.3 billion in crypto assets that belonged to the bankruptcy estate.
Voyager has planned to finalize its sale by September. However, the firm has rejected offers from the CEO of FTX Sam Bankman-Fried. However, the crypto billionaire lashed out at the firm citing various reasons.
Along with this, the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) argued that Voyager is misleading customers with financial claims. Nonetheless, the recent developments have come as a sigh of relief for consumers. Many customers who had their funds frozen will be reimbursed this way.
The crypto market is still struggling with an uncertain pattern. There is no clear path for the overall market to move forward. The total capitalization of the market is around $1.1 Trillion. However, the crypto winter is far from over. The market has the tendency to go up or down at any time.
The leading crypto token, Bitcoin is hovering around the $23K mark. But these positive developments in financially struggling crypto firms will induce some positivity in the overall market. Also, it might restore the faith of investors and consumers in the struggling industry.