Home Markets Crypto lender Voyager Digital gets approval to return $270 million to clients, The Wall Street Journal reports

Crypto lender Voyager Digital gets approval to return $270 million to clients, The Wall Street Journal reports

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Crypto lender Voyager Digital gets approval to return $270 million to clients, The Wall Street Journal reports

Representations of cryptocurrencies and the Voyager Digital logo are seen in this illustration taken July 7, 2022. REUTERS/Dado Ruvic/Illustrations/File Photo

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Aug 4 (Reuters) – The U.S. bankruptcy court in New York has given crypto firm Voyager Digital Holdings Inc permission to return $270 million in cash to its clients, The Wall Street Journal reported on Thursday.

Judge Michael Wiles, who is overseeing Voyager’s bankruptcy, ruled the company provided a “sufficient basis” to support its claim that customers should be allowed access to the custody account held at the Metropolitan Commercial Bank, the report said. Log. (https://on.wsj.com/3SpvW09)

The company was not immediately available for comment.

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Voyager, one of many companies struggling in the wake of the big crypto market turmoil, filed for Chapter 11 last month.

In its bankruptcy filing, Voyager estimated that it had more than 100,000 creditors and between $1 billion and $10 billion in assets, along with liabilities of the same value.

Last week, the Federal Reserve and the Federal Deposit Insurance Corp (FDIC) ordered the company to cease and desist from making “false and misleading” claims that its customers’ funds were government protected.

Regulators said the company just had a deposit account at the Metropolitan Commercial Bank and clients investing through its platform had no FDIC insurance. Read more

Crypto lenders like Voyager have exploded during the COVID-19 pandemic, luring depositors with high interest rates and easy access to loans rarely offered by traditional banks. However, the recent fall in crypto markets – triggered by the fall of two major tokens in May – has hurt lenders. Read more

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Reporting by Akanksha Khushi in Bengaluru; Editing by Maju Samuel

Our standards: The Thomson Reuters Trust Principles.

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