Voyager Digital Recovers $484 Million from FTX and 3AC Settlement

Voyager’s bankruptcy proceedings have seen positive developments after the company’s recent settlements, and it looks like the company will recoup more money.

According to a filing dated April 9, 2024, bankrupt crypto lender Voyager Digital said it has recovered around $484 million through settlements with crypto exchange FTX, VC Three Arrows Capital (3AC), and Directors and Officers (D&O) insurance.

As noted, the settlement with FTX will release $450 million, representing roughly 25% of creditors’ original claims. Once the settlement agreement is approved, the money will soon be distributed to Voyager’s creditors.

More Money Was Recovered

The filing states that the FTX Debtors’ $5 million deposit, previously made during Voyager’s bankruptcy sale and held in escrow, will be released to the Wind-Down Debtor.

Voyager also announced it reached a settlement with D&O insurance, and as a result of the settlement, at least $14.35 million will be paid to the Wind-Down Debtor, which is expected to benefit Voyager’s creditors. The additional amount helps Voyager’s overall recovery efforts.

Finally, Voyager claimed it has recovered $20.43 million from ongoing litigation with 3AC, with the potential for additional recoveries. These legal processes take a lot of time, and many people are waiting to see the results.

Despite these recoveries, Voyager still faces hurdles. Over 270,000 checks totaling $17 million remain unclaimed, with most being small amounts. To address this, they’ve set an April 20, 2024, deadline for claiming these checks, after which they’ll be considered forfeited.

The company encountered another challenge with a data breach at FTX that compromised creditor information. Kroll, the third-party agency handling FTX’s bankruptcy claims, reportedly experienced a cybersecurity incident that leaked user information.

After the incident surfaced, FTX froze accounts impacted by the Kroll data breach as a precaution. FTX claimed its internal systems and user passwords were not compromised. However, investigations are ongoing to determine the source and impact of this breach.

Following the collapse of 3AC in July 2022, Voyager Digital filed for Chapter 11 bankruptcy protection in the Southern District Court of New York. At the time of filing, the company had over 100,000 users and managed an estimated $1 billion to $10 billion in assets. Their total debt was estimated to be between $1 billion and $10 billion.

Voyager CEO Stephen Ehrlich said the action was voluntary to protect the platform’s assets and the interests of shareholders, especially investors. He reassured users that Voyager would continue operations.

According to the company’s debt restructuring plan, customers with crypto assets held in Voyager accounts will receive a portion of the remaining crypto assets, any debt collected from Three Arrows Capital, and potentially shares in a new Voyager company formed after the restructuring.

3AC’s Founder Returned With New Exchange

Su Zhu, co-founder of Three Arrows Capital (3AC), announced in February 2024 his new project, the decentralized derivatives exchange OX.FUN, had successfully secured $4 million in funding. Foresight Ventures, a Singaporean venture capital firm that owns The Block, led the funding round, with other participants including Double Peak Group, Emchain, and Genblock Capital.

Launched in January this year, OX.FUN is a decentralized exchange that focuses on perpetual contracts. Su Zhu claimed the project plans to use the new funds for product development, team building, and platform expansion.

The announcement quickly attracted early users, with $1.5 billion OX deposited and $20 billion OX traded since launch. Additionally, OX.FUN plans to introduce copy trading vaults and other passive earning options.

It’s worth noting that Su Zhu and Kyle Davies, co-founders of OX.FUN previously created a centralized exchange called Open Exchange (OPNX). Formerly known as Coinflex, OPNX rebranded in March 2023. The exchange targeted the crypto asset claim trading niche from bankrupt companies like FTX and even 3AC itself.

Despite raising $25 million, OPNX struggled to gain traction and failed to succeed. As a result, the exchange closed its doors on February 2, 2024.

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