VGX, the native token for Voyager Digital, has recorded an over 200% price gain during the past 24 hours. The token suffered a major blow after the cryptocurrency exchange filed for bankruptcy because of a liquidity crisis.
Now, customers of the Voyager Digital exchange hope they will recover their funds, causing the VGX pump.
Recovery hopes for Voyager Digital
Voyager, one of the largest social trading platforms in the crypto market, filed for bankruptcy earlier this month after Three Arrows Capital defaulted on a loan valued at more than $650 million. Account holders at the Voyager exchange were concerned about whether they would ever access cryptocurrency holdings.
Crypto investors on the exchange were not the only ones concerned by the bankruptcy filing. Voyager Digital is a publicly listed company on the Toronto Stock Exchange, and the shareholders are also concerned after the company sent out a notice to have it delisted from the stock exchange.
A press release by Voyager said that account holders who held cryptocurrencies in their accounts would receive several cryptocurrencies and proceeds after the recovery of funds from 3AC. They would also be eligible for common shares in a newly-launched company and VGX tokens.
According to this exchange, the plan will involve allowing customers to choose the portion of common shares and crypto they receive based on the maximum threshold. On the other hand, any compensation plans will require approval from the court, and they will also be changed depending on the current discussions with the relevant parties.
Clients with USD balances will receive their funds back after completing a reconciliation and fraud prevention process led by the Metropolitan Commercial Bank. While filing for bankruptcy earlier this month, Voyager said it had more than $100 million in cash and cryptocurrencies. These funds would support the exchange’s daily operations during the bankruptcy filing.
Voyager’s liabilities
Voyager holds around $1.3 billion worth of cryptocurrency assets on the platform, and it has claims against other companies such as 3AC, Alameda Research, and Genesis Global Capital. These firms owe Voyager around $1.12 billion.
Retrieving the funds owed by 3AC could be a tough task for Voyager as the hedge fund has already filed for Chapter 15 bankruptcy, which protects its assets from being liquidated by creditors.
As VGX investors worry about compensation, some crypto projects are already picking up. Battle Infinity, a metaverse-themed play-to-earn platform ranking as one of the best new cryptos, is currently in a presale phase. IBAT offers potential for gains and allows users to access play-to-earn features.
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This article was written for Business 2 Community by Ali Raza.
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