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

Bankrupt cryptocurrency firms FTX Trading and Voyager Digital Holdings have reached an agreement to settle their loan disputes, a move aimed at reimbursing creditors.

The longstanding claims and disagreements between the two parties concluded on Tuesday, paving the way for the complete release of the $445 million owed to Voyager, inclusive of interest.

Voyager’s downfall was exacerbated by the collapse of the crypto hedge fund Three Arrows Capital (3AC), to which it had lent approximately 60% of its holdings.

In a motion filed on Tuesday, FTX, facing financial difficulties, sought approval from a Delaware bankruptcy court for the agreement. It emphasized that the deal entails “mutual releases fully resolving all claims and disputes between and among” Voyager and FTX.

The dispute between the two began with a cryptocurrency loan made by Voyager to Alameda Research Ltd., a subsidiary of FTX, in October 2021, sparking a series of legal actions.

In January of the following year, Alameda and FTX initiated legal proceedings against Voyager to reclaim loan repayments. Voyager retaliated by filing proofs of claim totaling $130 million against FTX in June 2023, citing Alameda’s breach of the terms of the October 2021 loan agreement.

Following the settlement, both companies agreed to cease further legal action against each other, contingent upon specific conditions outlined in the filings.

A Ray of Hope for Voyager Creditors?

The successful resolution with FTX offers hope to investors who have been impacted by having their cryptocurrencies tied up on the platform.

Voyager’s counsel expressed confidence in the settlement, highlighting it as a particularly favorable outcome for Voyager creditors. They emphasized the risks, costs, delays, and market uncertainties associated with ongoing litigation, underscoring the importance of the agreement.

As a result of the settlement, approximately $450 million, along with accrued interest, will soon be released. This amount can then be distributed to creditors in a second distribution expected in the coming months.

In addition to the positive news, the filing also cautioned creditors about potential scams claiming to represent Voyager. The counsel warned of fraudulent activities targeting Voyager creditors but reassured that measures have been implemented to address and prevent such occurrences.

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I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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