Bankrupt crypto firms FTX Trading and Voyager Digital Holdings have reached a settlement in their loan disputes, which will help reimburse creditors. The settlement would release $445 million to Voyager, including interest, and put an end to the long-standing claims and disputes between the two parties. The Delaware bankruptcy court will need to approve the deal, which provides mutual releases resolving all claims and disputes between FTX and Voyager. This dispute originated from a cryptocurrency loan that Voyager made to Alameda Research Ltd., an FTX subsidiary, in October 2021.
Voyager’s financial troubles were further complicated by its involvement with the collapsing crypto hedge fund Three Arrows Capital (3AC), to which it had loaned around 60% of its holdings. After FTX and Alameda Research Ltd. brought an adversary proceeding against Voyager in January last year to recover loan repayments, Voyager filed proofs of claim for $130 million against FTX in June 2023, accusing Alameda of breaching the terms of the loan agreement. Following the settlement, both firms have agreed not to take any further legal action against each other, contingent on specific conditions outlined in the filings.
The resolution of the dispute between FTX and Voyager signals hope for investors who had their cryptocurrencies locked up on the platform. The settlement is viewed as a favorable outcome for Voyager creditors, as it avoids the risks, expenses, delays, and market uncertainties associated with prolonged litigation. The agreement will release $450 million to creditors in the near term, which can be distributed in a second distribution in the coming months. The filings also cautioned creditors to be vigilant of scammers posing as Voyager and attempting fraudulent activities targeting them, while steps have been taken to address such cases.
The successful agreement between FTX Trading and Voyager Digital Holdings represents a positive development in the overall landscape of crypto bankruptcies. The resolution of loan disputes and the release of funds to creditors alleviate some of the uncertainties and challenges faced by investors in the aftermath of the bankruptcies. The settlement serves as a potential model for addressing similar disputes in the cryptocurrency industry and highlights the importance of clear and timely resolutions to protect the interests of all parties involved. Moving forward, the collaboration and cooperation between bankrupt firms and creditors can lead to more efficient and equitable outcomes in resolving financial disputes and supporting the integrity of the crypto market.
As the settlement between FTX and Voyager is finalized and funds are released to creditors, it marks a significant milestone in the bankruptcy proceedings of the two crypto firms. The conclusion of the long-standing disputes and the agreement to cease further legal actions demonstrate a commitment to resolving issues amicably and ensuring that creditors are reimbursed in a timely manner. The transparency and collaboration displayed in reaching this settlement could set a positive precedent for future bankruptcy cases in the cryptocurrency industry, promoting trust and stability in the market. Ultimately, the resolution of loan disputes and the distribution of funds to creditors will help restore confidence among investors and stakeholders in the crypto space, leading to a more resilient and sustainable financial ecosystem.
