Outside Source
Cryptocurrency brokerage firm Voyager Digital has provided an update on its restructuring plan to compensate its customers and resume their account access. The firm clarified that while their USD deposits are safe and secure, it cannot guarantee what portion of their crypto will be returned.
Crypto Not Protected by FDIC
In a statement on Monday, Voyager assured customers that their USD deposits would be returned to their rightful customers following a reconciliation and fraud prevention process. All customer USD is reportedly held with the Metropolitan Commercial Bank (MCB) of New York, and is FDIC insured.
“That means you are covered in the event of MCB’s failure, up to a maximum of $250,000 per Voyager customer,” clarified the firm.
Voyager came under FDIC investigation on Thursday for previously marketing their customers’ accounts as FDIC insured, even in the event of company failure. The broker has since updated its website to clarify that this insurance does not, in fact, apply to the collapse of Voyager or its “custodians.”
Thankfully for customers, this shouldn’t matter for USD holders whose entire account holdings are kept at the MCB, to which this insurance applies. On the other hand, Voyager’s customer agreement states that their depositors’ rights to their cryptocurrency are “unclear” in the event of the company’s insolvency.
After filing for bankruptcy last week, Voyager unveiled its restructuring plan which, as CEO Stephen Ehrlich puts it, seek to “maximize value for all stakeholders.” It specified that customers with cryptocurrency in their accounts will be compensated with a combination of crypto, Three Arrows Capital (3AC)’s recovery proceeds, Voyager tokens, and shares in the newly reorganized company.
This plan is still subject to change and awaits court approval.
Exposure to 3AC
In the update, Voyager clarified that it holds about $1.3 billion in crypto assets on its platform. Another $650 million in crypto is held in claims against 3AC – the insolvent VC firm whose founders are rumored to have vanished from Singapore. That crypto includes a combination of 350 million USDC and 15,250 Bitcoin.
Voyager said that the total return of its customers’ funds will depend on the recovery of 3AC’s assets.
Multiple other platforms including BlockchainCom and Deribit are also seeking liquidation funds from 3AC to avoid suffering similar contagion.
This article first appeared at CryptoPotato
