Voyager Digital filed for bankruptcy earlier this month and is now looking to settle its clients soon.
Struggling cryptocurrency broker Voyager Digital has asked the federal bankruptcy court to honour withdrawal requests from its clients.
According to the company’s filings, there are customer withdrawals worth over $350 million currently held by Metropolitan Commercial Bank.
Voyager Digital pointed out that it has around $1.3 billion worth of cryptocurrencies on its platform. However, it also held more than $350 million in a For Benefit of Customers (FBO) account at Metropolitan Commercial Bank.
The cryptocurrency broker added that it has claims against Three Arrows Capital exceeding $650 million.
Voyager Digital’s July 14 filing with the US Bankruptcy Court for the Southern District of New York said;
“The debtors have determined, in their business judgment, that failure by the debtors to honor withdrawals any longer could materially harm customer morale during these Chapter 11 cases. Reinstating access to withdrawals will alleviate customer concerns that access to their cash held in the [Metropolitan Commercial Bank] accounts, and the integrity of the platform, is restored.”
In its court filing, the cryptocurrency broker asked the bankruptcy court to allow it to conduct other financial actions.
Some of these actions include liquidating assets from customer accounts with negative balances, “sweep cash” held in third-party platforms and exchanges, conducting “ordinary course reconciliation” of the customer accounts, continuing cryptocurrency staking and “granting related relief.”
The bankruptcy court has scheduled a hearing for August 4 at 11:00 a.m. Eastern Time.
Voyager Digital was one of the leading cryptocurrency brokerage platforms prior to its bankruptcy. The bear market has affected the performance of numerous cryptocurrency companies, including the likes of Celsius and Babel Finance.
The total cryptocurrency market cap stands below $1 trillion, down from the all-time high of $3 trillion recorded in November 2021.