A US bankruptcy court in New York has granted crypto firm Voyager Digital Holdings Inc permission to return $270 million in customer cash, the Wall Street Journal reported on Thursday.
Judge Michael Wiles, who is overseeing Voyager’s bankruptcy, ruled that the company had provided a “sufficient basis” to support its claim that customers should be allowed access to a deposit account at Metropolitan Commercial Bank, the newspaper reported. The company was not immediately available for comment.
Voyager, one of several firms facing widespread crypto market turbulence, filed for Chapter 11 last month. Voyager estimated in its bankruptcy filing that it had more than 100,000 creditors and between $1 billion and $10 billion in assets, and also liabilities of the same value.
Last week, the company was ordered by the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) to cease and desist from making “false and misleading” claims that its customers’ funds are protected by the government. Regulators said the company had only a deposit account with Metropolitan Commercial Bank and customers investing through its platform had no FDIC insurance.
Cryptolenders like Voyager have boomed during the COVID-19 pandemic, attracting depositors with high interest rates and easy access to loans that traditional banks rarely offer. However, the recent slump in crypto markets triggered by the crash of two major tokens in May has hurt lenders.
