Voyager Digital Holdings Inc. has been permitted by the U.S. Bankruptcy Court in New York to restore $270 million in customer funds, Wall Street Journal reported on Thursday. According to the Journal, Judge Michael Wiles, who is in charge of Voyager’s bankruptcy, decided the firm had “sufficient grounds” to back up its claim that clients should be given access to the custodial account kept at Metropolitan Commercial Bank.
Voyager Filed For Chapter 11 Last Month
Voyager Digital, one of many businesses that struggled after the widespread turbulence in the cryptocurrency market, filed for Chapter 11 last month. In its bankruptcy filing, Voyager stated that it had over 100,000 creditors, assets worth between $1 billion and $10 billion, and liabilities with a similar estimated value. The Federal Reserve and the Federal Deposit Insurance Corp (FDIC) issued a cease-and-desist order to the company last week, telling it to stop deceiving with its false claims that the government insured its clients’ funds.
Metropolitan Commercial Bank
According to the regulators, the company only maintained a bank account at Metropolitan Commercial Bank, and the FDIC covered none of the investors using its platform. During the COVID-19 pandemic, cryptocurrency lenders like Voyager saw a surge in business, luring depositors with high-interest rates and convenient access to loans that conventional banks hardly ever gave. Lenders have suffered from the recent decline in cryptocurrency markets, which was brought on by the failure of two significant tokens in May.