The Bankruptcy Auction for Crypto Lender Voyager Has Begun

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Last Updated on September 17, 2022 by Bitfinsider

Voyager Digital Ltd., a bankrupt cryptocurrency lender, has begun its auction in New York. The auction will take place at the investment bank Moelis’s midtown office.

The auction could last longer than Tuesday. The outcome of the bid or bids will be revealed at a hearing scheduled for September 29.

According to Voyager’s spokesperson, there is also a chance that the results will be revealed sooner.

According to a court document filed in the United States Bankruptcy Court for the Southern District of New York, on September 13, Moelis & Company, Voyager’s investment bank, will hold an auction for the crypto lender’s assets.

It is still unknown how many bidders will attend the auction. Earlier this year, the company stated that it had been contacted by 88 parties, with 22 actively participating in the discussions.

Although the interested parties have not been named, both FTX and Binance have expressed interest in Voyager’s assets.

Voyager had frozen its customers’ funds as it went bankrupt. Customers who had their savings withheld by Voyager are hoping that this auction will help them get their money back.

Customers of Voyager have been unable to access their funds since the beginning of July, when the crypto market downturn forced the lender to suspend withdrawals, resulting in bankruptcy.

FTX, a popular cryptocurrency exchange, had offered $15 million in cash in exchange for Voyager customer information, as well as an undisclosed sum for the assets. Voyager referred to it as a “lowball bid.”

Voyager is a New York-based company that traded publicly in Toronto before declaring bankruptcy in July.

This was in response to a large number of withdrawal requests received by the exchange.

While Voyager was quite uncertain and ambiguous, the crypto lender had announced and ensured that these cash deposits were insured by the Federal Insurance Corporation through its marketing policies (FDIC).

This has specifically led to consumer skepticism. It also led many customers to believe that their crypto deposits were now protected.

It was later discovered that, despite the fact that the platform was linked to the FDIC-insured Metropolitan Commercial Bank, the insurance did not protect the customers.

The Federal Deposit Insurance Corporation is one of two agencies responsible for providing deposit insurance to depositors in American financial institutions.

The National Credit Union Administration, which regulates and insures credit unions, is the other corporation.

According to reports, a customer lost $1 million on the Voyager platform, with the majority of her funds parked in a large sum in a stablecoin, which was also supposed to be FDIC insured.

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