The troubled crypto lender Voyager Digital will auction its remaining assets on September 13 as it moves through the Chapter 11 bankruptcy process. The auctioning of Voyager Digital assets is set to occur at the New York offices of its investment banker, Moelis & Company.
According to a notice filed on Tuesday with the United States Bankruptcy Court of the Southern District of the New York, the auction is set to take place on September 13. The court is set to hold a hearing on September 29 to approve the sale results.
In a series of tweets posted on September 7, the defunct crypto lender revealed the details of the auction plans saying:
“Voyagers, we want to let you know that multiple bids were submitted as part of the company’s restructuring process. As a result, an auction is scheduled for September 13.”
The company also added that it would “share more information about the winning bidder” and the auction’s implications for customers after the process concludes later this month.
In August, Voyager’s company lawyers said at least 22 investors had shown interest in the company’s assets. The lawyers, however, did not specify the number of formal bids received in due time. It is not yet known which firms are involved in the bidding process.
On July 22, Sam Bankman-Fried’s FTX and Alameda Research offered to buy all Voyager Digital assets and digital asset loans, except loans to Three Arrows Capital (3AC). The offer was labeled ‘’lowball’’ by the lender and turned down within days.
Voyager Digital’s Road to Bankruptcy
Voyager suspended trading, deposits, withdrawals, and rewards on July 1 and later, on July 5, announced that it was going into a Chapter 11,’’ restructuring process’’ – a form of bankruptcy with over $1 billion in debts. The company said customers with cryptocurrency in their accounts would receive ‘’a combination of the crypto in their accounts apart from 3AC recovery, common shares in the newly re-organized Company, and Voyager tokens.’’
At the time of filling, the lender had approximately $1.3billion of crypto assets on the platform, and over $350 of cash held in a For Benefit Of (FBO) for customers.
Voyager Digital’s bankruptcy came days after the company issued a notice that it was exploring legal solutions against Three Arrow’s Capital (3AC) which owed it 15,250 Bitcoin and 350 million USD Coin (USDC). However, Voyager assured its clients that it would continue servicing their accounts.
In July, Voyager co-founder Stephen Ehrlich said,’’ This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers.’’
In August, the court allowed the crypto firm to pay its key employees, which the company deemed essential to its continuing operations. As a result, the company paid out bonuses totaling $1.9 million despite opposition from some of its creditors.
Conclusion
Most of the insolvencies and bankruptcies in the crypto market, including Voyager Digital, 3AC, and Celsius, among many others, are linked either directly or indirectly to the collapse of the Terra/LUNA stablecoin ecosystem and the rising inflation rates, which works against risk assets, like cryptocurrencies.
However, during the auction announcement, Voyager said customers would recover their assets after the completion of the selling process. Customers must review their Voyager’s record of indebted assets. Notably, October 3, 2022, is the deadline for customers with disputes to submit their proof of claim for resolution.
