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As the crypto crash made its first waves in the market in mid-May, many projects and businesses suffered. But perhaps the most affected by the volatility are the many companies that have invested heavily in the crypto market. digital travel was one of the companies so hard hit by the fall that it went bankrupt. Today’s Voyager Digital news, however, sees a silver lining beginning to emerge for the company.
Voyager, as well as other companies like Celsius (CEL-USD) and Capital of the Three Arrows, was one of the hardest hit by the crypto crash. Indeed, he learned a hard lesson when it comes to crypto lending and speculative investing – a lesson that has been compared to the real estate market crash of 2008. These companies took on heavily over-leveraged crypto loans in order to stake more crypto and to increase their income many times over. What they did not foresee was a rapid drop in crypto values forcing them to fail margin calls from their thousands of lenders.
This plunged Voyager Digital into massive debt, prompting the company to freeze all withdrawals from its platform. In total, the company held $5.7 billion in liabilities when it filed for Chapter 11 bankruptcy protection in early July.
The company has an uphill battle ahead as it strives to deleverage. But, it’s not as lost as its peers. Three Arrows, for example, looks increasingly worn as its bankruptcy proceedings drag on. Indeed, the founders of the stock exchange have completely disappeared and refuse to cooperate with the liquidators. Celsius, meanwhile, relies on the long term of crypto mining to get out of debt.
Voyager Digital News: Funds Return to Customers, Purchase Offers Grow
In this week’s Voyager Digital news, investors see the company’s outlook shine a little brighter. Bankruptcy proceedings are proceeding smoothly, with clients preparing to reclaim their frozen assets. Moreover, the company is attracting more and more lucrative bailout offers.
Indeed, the company was lucky to receive a bailout opportunity from none other than Sam Bankman-Fried. FTX before. The company, alongside the sister company Alameda Search, offered Voyager a $200 million line of credit. He also offered to provide customers with the cash lost due to Voyager’s asset freeze if they signed up for FTX’s services.
However, Voyager was not happy with this offer, calling it a “low-ball” proposal. Rather than jump on the initial bailout, the company was waiting for the right deal. He says today that he is already on the right track; Voyager says it already receives several offers that are superior to FTX’s.
Not only that, but the company is preparing to return much of its frozen assets to customers. As InvestorPlace Eddie Pan reported in July that US dollars in customer accounts are insured by the Federal Deposit Insurance Corporation (FDIC). Users thus expect to receive their money “after a reconciliation and fraud prevention process”, according to Voyager.
The judge presiding over Voyager’s bankruptcy proceedings finally gives the go-ahead today. As a result, US$270 million accrues to legitimate customers. The billion dollars remaining in Voyager’s Metropolitan Commercial Bank (or MCB) account belong to the bankruptcy estate; creditors will receive these funds.
As of the date of publication, Brenden Rearick had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.