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Voyager faces backlash from users over funds

Voyager faces backlash from users over funds

Crypto lending company Voyager has released an update on its “restructuring process” and its impact on its crypto users. Last week, the company filed for bankruptcy after defaulting on a $650 million loan to investment firm Three Arrows Capital (3AC).

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Voyager recently stopped withdrawals, deposits and other operations on its platform. The company plans “an efficient path to regain account access and restore value for customers.”

The crypto lending platform claims that users have reassured customers with USD deposits. The company clarified that its deposits are kept in a special bank account called For Benefit of Customers (FBO) with the American banking institution Metropolitan Commercial Bank of New York (MCB).

In practice, this means that user deposits are supposedly protected by the Federal Deposit Insurance Corporation (FDIC). This protects funds up to $250,000 per Voyager customer in the event of a bank failure, but not if the crypto lending company goes bankrupt.

However, Voyager clarified that they do not hold their clients’ USD deposits. The MCB has been entrusted with this responsibility. Therefore, customers should get their funds in USD without further hassle once the company completes “a fraud prevention and reconciliation process.”

Cryptocurrency users are less fortunate as Voyager has clarified that they will receive a mix of assets and much of the redemption process appears to be dependent on 3AC. The company expects the investment firm to be accountable and use that money to pay its clients.

Users will receive Voyager tokens, shares, or cryptocurrencies in a prorated or proportional allocation tied to the 3AC acquisition, the “newly reorganized company,” and other factors that appear to be outside of the company’s control. On the specific amount each user will receive, Voyager said:

At this point, we suggest that clients receive their crypto as described above. However, the exact figures will depend on what happens in the process of restructuring and recovering 3AC’s assets.

Crypto lending company plan is subject to change

On Twitter, Voyager expressed concern and anger at the plan. Most users simply want their funds back as they were before trading ceased and reject the idea of ​​being paid in Voyager shares.

In this sense, the company seems willing to negotiate with its users and give them the opportunity to vote on the best course of action. traveler said:

We developed a restructuring plan that would preserve clients’ assets and provide the best opportunity to maximize value. In addition, the Company is seeking various strategic alternatives to assess the value of the independent business against an investment or sale by a third party.

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At the time of writing, the total crypto market capitalization is $888 billion, with some sideways movement in recent weeks.

Total crypto market capitalization trending lower on the 4-hour chart. Source: business view

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