Voyager Customers Poised for Partial Relief: FTX US Deal Offers 72% Asset Recovery

For Voyager Digital customers who have been anxiously awaiting news about their frozen funds, there might finally be a glimmer of hope. Court documents reveal a tentative agreement that could see them recoup a significant portion of their assets. Let’s dive into the details of this developing situation and what it means for Voyager users and the broader crypto landscape.

What’s the Deal on the Table for Voyager Customers?

According to recent court filings, a preliminary agreement between the bankrupt cryptocurrency lender Voyager Digital and FTX US proposes a path for Voyager customers to potentially recover approximately 72% of the value of their accounts. This is a significant development for users who have had their funds locked since Voyager halted withdrawals in July.

However, it’s crucial to understand that this deal isn’t finalized yet. As the judge presiding over the bankruptcy case stated during a recent hearing, this agreement is still contingent on several key approvals:

• **Voyager Creditor Approval:** Voyager’s creditors need to give their nod to the proposed sale. Their agreement is essential for the plan to move forward.
• **US Bankruptcy Court Approval:** Ultimately, a US bankruptcy judge must approve the entire bankruptcy payout plan. This judicial oversight ensures fairness and legal compliance throughout the process.

The judge emphasized the conditional nature of the agreement, stating unequivocally, “If the plan falls apart, there’s no part of this agreement that survives.” This highlights that while progress is being made, the situation remains fluid and subject to change.

Is There a Safety Net for Voyager? The ‘Fiduciary Out’ Clause

Adding another layer of complexity, the agreement includes a “fiduciary out” clause. This provision is designed to protect Voyager and its creditors. What does it mean?

Essentially, the “fiduciary out” clause allows Voyager to terminate the agreement with FTX if a better offer emerges that would provide a more favorable outcome for creditors. This is a common practice in bankruptcy cases, ensuring that businesses can consider superior proposals until the sale is officially closed. It’s about maximizing returns for those who are owed money.

Think of it like this: Voyager is obligated to explore all avenues to get the best possible deal for its creditors. If another company comes along with a more attractive offer than FTX’s, this clause gives Voyager the flexibility to consider it.

FTX Platform: The Proposed Path Forward

Voyager had previously indicated that the plan involves transitioning its users to the FTX platform. This follows FTX US winning the bid to acquire Voyager’s assets on September 27th, valuing the company at approximately $1.4 billion after a competitive two-week bidding process.

Breaking Down the FTX Plan: What Can Voyager Customers Expect?

Let’s examine the key components of the preliminary plan from FTX:

• **Priority Claims: Full Payment:** The plan proposes to fully pay off all priority claims. These are claims that, by law, must be paid first in a bankruptcy proceeding.
• **General Account Holders: ~72% Recovery:** For the majority of account holders, the plan aims to recover roughly 72% of the value of their accounts. These accounts have been frozen since July 1st, leaving users unable to access their funds.
• **3AC Lawsuit: Potential Upside:** Importantly, the 72% recovery figure does not include any potential funds recovered from Voyager’s lawsuit against Three Arrows Capital (3AC). Any successful recovery from 3AC could further increase the amount returned to account holders.

In essence, any money recovered from the 3AC lawsuit would be a bonus, potentially boosting the final percentage returned to Voyager users beyond the initial 72% estimate. This offers a potential upside for creditors.

Voyager’s Bankruptcy: The Backstory

To understand the current situation, it’s important to rewind and look at how Voyager ended up in bankruptcy. The cryptocurrency lender filed for Chapter 11 bankruptcy protection on July 4th. What triggered this collapse?

The primary catalyst was the failure of the cryptocurrency hedge fund Three Arrows Capital (3AC). Voyager had significant loan exposure to 3AC, and when 3AC defaulted on its loan payments, it created a severe liquidity crisis for Voyager, ultimately leading to bankruptcy.

Valuation of the Deal: What’s FTX Paying?

Voyager has stated that FTX US’s bid is composed of two main parts:

• **Fair Market Value of Crypto Holdings:** The fair market value of Voyager’s cryptocurrency holdings, estimated to be $1.3 billion as of September 26th (the date of valuation remains undisclosed).
• **Additional Consideration:** At least $111 million in additional consideration.

This combined valuation represents FTX US’s offer to acquire Voyager’s assets and facilitate the proposed payouts to creditors.

Looking Ahead: What’s Next for Voyager Customers?

While the tentative agreement between Voyager and FTX offers a path toward partial recovery for Voyager customers, several steps remain before any funds are actually distributed. The approvals from creditors and the bankruptcy court are critical hurdles that must be cleared.

For Voyager users, the key takeaways are:

• **Potential Recovery:** There is a potential path to recover around 72% of their frozen assets.
• **Not Guaranteed:** The deal is not final and is subject to approvals and potential competing offers.
• **Patience Required:** The bankruptcy process is complex and can take time. Further updates and official announcements from Voyager are expected as the process moves forward.

The FTX-Voyager deal represents a significant development in the ongoing saga of crypto company insolvencies. Whether this agreement ultimately provides the relief Voyager customers are hoping for remains to be seen, but it is undoubtedly a step in a potentially positive direction. As the situation evolves, staying informed through official channels and reliable news sources will be crucial for affected users.