Troubled crypto lending firm Voyager Digital announced it will enable cash withdrawals on Thursday after the court had approved it.
Customers with cash in their accounts can expect withdrawals to reopen as early as August 8.
The platform previously halted trading, deposits, and withdrawals early in July, citing market turmoil. It then made the decision to file bankruptcy and commenced legal proceedings.
In the latest development of the case, Voyager has been granted permission to reopen withdrawals; customers can now withdraw cash held in a for benefit of (FBO) account at the Metropolitan Commercial Bank in New York.
The act is scheduled to go into effect this Thursday, with Voyager providing eligible customers access to the service app.
“We know how important it is to access your cash, and with this approval, we will soon begin processing cash withdrawals,” the blog post stated.
Each customer can request a maximum amount of $100,000 in U.S. dollars via ACH per day. Following receipt of the order, the firm will start fraud checks and account reconciliation.
Cash is Flowing
Eligible customers are customers that have USD cash in their accounts and pass Voyager’s reviews following their withdrawal requests.
Voyager also stated that it would send an email with customers’ holding details. Customers can double-check all of the details and file a dispute if any inaccuracies are discovered. The deadline for submitting claims is October 3.
The money will be returned in 5 to 10 business days, according to the company’s statement. It should be noted, however, that the period may be extended depending on the users’ banks.
Voyager announced in June that it had signed a $500 million loan agreement with trading firm Alameda Research due to losses from its connection with Three Arrows Capital.
The crypto lender filed for Chapter 11 bankruptcy in New York’s Southern District Court on July 5, according to the company at the time as part of a reorganization plan aimed at allowing users to re-access their accounts.
Voyager’s bankruptcy filing came after Three Arrows Capital, Voyager’s debtor, had filed for bankruptcy due to its inability to cover its debts. The crypto hedge fund was reportedly in a liquidity crisis as the result of the LUNA collapse.
Sam Bankman-Fried, the leading figure and crypto billionaire behind FTX and Alameda Research, reached out to Voyager for a buyout offer last month.
Sam wanted to buy the crypto lender’s assets at market value and gave customers the option to claim their shares by opening a new account at FTX.
Voyager, on the other hand, rejected the offer, calling it a low-ball bid. On August 4, an attorney for Voyager told the court that the company received more expensive offers for its assets than FTX and Alameda.
Celsius Bankruptcy Proceedings
Apart from Voyager, Celsius is another major crypto lender to file for bankruptcy under Chapter 11.
The firm also entered court proceedings and planned to hire former CFO Rod Bolger in order to add assistance to the proceedings. However, Celsius said in the latest statement that it requested a withdrawal motion to rehire Bolger.
In response, some of the investors’ attorneys have filed an opposition to Celsius’s rehiring decision due to a lack of information from Celsius. The company also suspended withdrawals, citing the challenging market status quo.
According to analysts, Celsius’ problem is that the 20% APY interest rate they offer users is fraudulent.
In one lawsuit, Celsius is accused of doing business under a Ponzi model. Accordingly, the company pays users in advance with the profits from new users.
Celsius also puts its funds in places with outrageously high returns. According to The Block, Celsius has invested at least $500 million in Anchor, the lending platform of a now-defunct stablecoin project.
Anchor allegedly promised investors a 20% annual return dependent on the number of cryptocurrencies they held.
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Author: Nicholas Say