Bankrupt crypto lender, Voyager, may reopen withdrawals in partnership with FTX as it proceeds with the restructuring process.
FTX Trading Ltd submitted a joint proposal to Voyager Digital that will allow customers to get early liquidity through FTX and recover part of their funds.
The proposal allows Voyager customers to open a new account on FTX and will get an opening cash balance that’s a portion of their bankruptcy claim.
They can choose to withdraw the cash immediately or use it to buy crypto assets on FTX. However, this proposal is voluntary, so customers may choose not to participate.
However, participants in the joint proposal will not acquire Voyager loans to Three Arrows Capital, and any funds recovered from the debt would be spent on funding more customer refunds.
FTX CEO Sam Bankman-Fried confirmed the joint proposal saying, “Voyager’s customers did not choose to be bankruptcy investors holding unsecured claims.”
He added that:
The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business – a way that allows customers to obtain early liquidity and reclaim a portion of their assets without forcing them to speculate on bankruptcy outcomes and take one-sided risks.
Voyager Yet to Respond
Meanwhile, Voyager is yet to accept the proposal. FTX set a July 26 deadline for response and hopes to complete the deal in the first weeks of august.
Even if Voyager accepts, it would still be subject to other processes, including court approval.
Voyager suspended withdrawals on July 1 and filed for bankruptcy a few days later. But the firm has also provided updates on its restructuring process, stating that the next court hearing is scheduled for August 4.
It reiterated that it is working on getting court approval so that those who deposited USD can withdraw their cash. The lender claimed that all USD deposits are FBO accounts at Metropolitan Commercial Bank (MCB).
Additionally, it is seeking to sell Coinify, which it described as a non-core asset. “We previously received Court approval to pay employees and other operating costs in the ordinary course of business. These bills are paid out of operating cash, not cash in the FBO accounts,” it added.