Investors Lost ‘Millions’ on Voyager Bankruptcy, Some Have Their Life Savings Frozen
‘I’m out millions of dollars’: Thousands of crypto investors have their lifetime savings frozen as Voyager Digital files for bankruptcy protection.
Robert (an anonymous user) first came across Voyager in March 2020. Like countless others, he decided to give the crypto broker a try. The platform was easy to navigate. It offered him an APY of up to 9%—much higher than a traditional savings account. It claimed to be FDIC (Federal Deposit Insurance Corporation) insured. And being a publicly traded company listed on the Toronto Stock Exchange, he thought, how bad could Voyager be?
Now we all know what happens…Robert stated that he had put about six figures on Voyager, representing 70% of his life savings, and was at a loss as to what to do next.
Many investors were shocked by the recent bankruptcy filing of crypto lender Voyager Digital. In a July 9 article, Fortune spoke to several such users. Some of them put nearly all of their life savings onto the platform, while others are said to have millions hanging in limbo.
As previously reported, Voyager paused withdrawals at the start of this month amid its liquidity issues as a result of Three Arrows Capital (3AC) defaulting on a $661 million loan from the firm. Despite Alameda supplying the firm with a $500 million loan in June, Voyager went on to file for bankruptcy on July 6.
“Every day, honestly, I cry,” Robert said, adding, “I don’t know what to tell my wife. As partners, we decided to [invest on Voyager], but she trusted me, more than anyone else, to make the proper decision.”
As an investor of six years, Robert went on to note that while he had conducted a relative amount of research on Voyager before using the platform, he would have never done so if he knew that the firm was going to lend out customer funds to a hedge fund:
“I had no idea that Voyager would be lending [customers’ USDC] out to a hedge fund. Had I known that it would be possibly lent out, I probably would have just kept it in cash in my safe.”
Fortune also spoke to popular crypto influencer Scott Melker, who is also known as The Wolf Of All Streets online and claims to have seven figures worth of funds stuck on Voyager.
“Listen, I’m out millions of dollars,” he said, adding that he was embarrassed about being over-exposed to Voyager despite often talking about risk management and protecting your assets.
Melker has around 851,000 followers on Twitter and 121,000 subscribers on YouTube. He stated that while he stands to lose a lot on Voyager, he feels worse about previously promoting the platform to his audience, friends and family.
“I understand that people make their own decisions, but they wouldn’t have even thought about it if I had not brought [Voyager] to their attention. And, frankly, that’s worse than losing my own money.”
As part of Voyager’s bankruptcy process, executives of the company have outlined intent to first reorganize the business into a new entity, and then repay users via a combination of crypto, proceeds from the Three Arrows Capital (3AC) recovery, Voyager tokens and common stocks in the newly reorganized corporate company.
However, it is unclear whether this will result in full compensation for all users.