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Loeb Restructuring & Bankruptcy partner Daniel Besikof is quoted in a Blockworks article discussing Voyager Digital, a cryptocurrency lender, which recently filed for bankruptcy.
According to the article, confusion surrounding Voyager Digital’s protection of funds drew the attention of the Federal Deposit Insurance Corporation (FDIC). The crypto lender had publicly said dollar deposits are insured by the FDIC, owing to a partnership with Metropolitan Commercial Bank. The FDIC issued a statement clarifying that the FDIC’s deposit insurance does not protect customers against Voyager Digital’s bankruptcy filing. The user agreement on Voyager’s website shows that the FDIC protection applies only if the partner bank fails.
Daniel described Voyager Digital’s bankruptcy filing as a negative development for its account holders, some of whom held millions of dollars of cryptocurrency assets in their accounts.
“Voyager Digital is treating those account holders essentially as unsecured creditors and proposing to satisfy their claims with a package of coins, equity in the reorganized Voyager and other assets,” Daniel told the publication. He went on to add that, “the value of the package is unknown.”
Click here to read the full article on Blockworks’ website.
According to the article, confusion surrounding Voyager Digital’s protection of funds drew the attention of the Federal Deposit Insurance Corporation (FDIC). The crypto lender had publicly said dollar deposits are insured by the FDIC, owing to a partnership with Metropolitan Commercial Bank. The FDIC issued a statement clarifying that the FDIC’s deposit insurance does not protect customers against Voyager Digital’s bankruptcy filing. The user agreement on Voyager’s website shows that the FDIC protection applies only if the partner bank fails.
“Voyager Digital is treating those account holders essentially as unsecured creditors and proposing to satisfy their claims with a package of coins, equity in the reorganized Voyager and other assets,” Daniel told the publication. He went on to add that, “the value of the package is unknown.”
Click here to read the full article on Blockworks’ website.
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Deputy Chair, Restructuring & Bankruptcy