Cryptocurrency lender Voyager Digital gets approval to return $ 270 million to customers

The U.S. bankruptcy court in New York has granted cryptocurrency firm Voyager Digital Holdings Inc permission to return $ 270 million in cash to its clients, the Wall Street Journal reported Thursday.

Judge Michael Wiles, who oversaw the bankruptcy of Voyager, ruled that the company provided a “sufficient basis” to support his claim that clients should be allowed access to the deposit account at the Metropolitan Commercial Bank. the newspaper said. The company was not immediately available for comment.

Voyager, one of many companies struggling in the wake of major cryptocurrency market turmoil, filed for Chapter 11 last month. In its bankruptcy filing, Voyager was shown to have more than 100,000 creditors and between $ 1 billion and $ 10 billion in assets, as well as liabilities of the same value.

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Last week, the Federal Reserve and Federal Deposit Insurance Corp (FDIC) ordered the company to cease and desist from making “false and misleading” claims that its clients’ funds were protected by the government. Regulators said the company just had a deposit account with the Metropolitan Commercial Bank and that clients investing through its platform did not have FDIC insurance.

Cryptocurrency lenders like Voyager exploded during the COVID-19 pandemic, attracting depositors with high interest rates and easy access to loans rarely offered by traditional banks. However, the recent decline in cryptocurrency markets, signaled by the fall of two major tokens in May, has hurt lenders.

Also read: What is the way to sell XRP for USD or cryptocurrencies

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