Bankrupt Voyager, FTX Strike Deal to Resolve Claims Against Each Other

CryptoNews.com

2024-04-11 03:13:59

Sujha Sundararajan

Last updated:

April 11, 2024 07:13 EDT | 1 min read

Bankrupt crypto firms FTX Trading and Voyager Digital Holdings have agreed to settle loan disputes, which would help reimburse creditors.

The long-standing claims and disputes between both the parties came to an end on Tuesday, which would entirely release the $445 million to Voyager, which includes interest.

Voyager’s crash was dragged in by the debacle of crypto hedge fund Three Arrows Capital (3AC). It had loaned about 60% of its holdings to 3AC.

According to a motion filed Tuesday the beleaguered FTX asked a Delaware bankruptcy court to approve the deal. It added that the deal provides “mutual releases fully resolving all claims and disputes between and among” Voyager and FTX.

The pair asserted claims against each other in their respective Chapter 11 bankruptcies. It all started from a cryptocurrency loan Voyager made in October 2021 to Alameda Research Ltd., an FTX subsidiary.

In January last year, Alameda and FTX brought an adversary proceeding against Voyager to recover loan repayments. In turn, it filed proofs of claim for $130 million against FTX in June 2023, accusing Alameda for breaching terms of the October 2021 loan agreement.

After the settlement, both firms will take no further action against each other, subject to certain conditions, the filings noted.

A Ray of Hope for Voyager Creditors?

The successful agreement with FTX indicates hope for investors who have had their cryptos locked up on the platform.

“I believe that the settlement achieved is a particularly favorable outcome for Voyager creditors given the risk, expense, delay and market uncertainty associated with continued litigation of the FTX Adversary Proceeding,” counsel to Voyager noted.

The settlement will result in $450 million, plus interest, being released in the near-term, which can be distributed to creditors in a second distribution in the coming months.

Additionally, the filing also warned creditors to be aware of scammers purporting to be Voyager. “We continue to receive reports of fraudulent activity targeted towards Voyager creditors,” the Counsel noted. However, measures have been taken to seal these cases.

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