Voyager Digital’s Executives Receive Threat from Customers in First Bankruptcy Hearing

The executives of Voyager Digital, the embattled digital currency platform which filed for bankruptcy last week have expressed worry over threats they receive from customers who have funds on the platform prior to its bankruptcy declaration.

The revelation was made by the company’s lawyer, Christopher Marcus at the firm’s first bankruptcy hearing before U.S. Bankruptcy Judge Michael Wiles in Manhattan. Marcus, from Kirkland & Ellis, argued that the company filed for bankruptcy and proposed the restructuring plan as fast as it could as a way to inform its users that all hope is not faded as they have not “lost everything.”

At the time when Voyager Digital filed its bankruptcy, the company said it has as many as3.5 million active users and over $5.9 billion in cryptocurrency assets in its vaults. The company said it did not count funds that are held in cash which are kept in a reserve at the Metropolitan Commercial Bank, worth as much as $350 million.

Voyager Digital and the Reassurance

The trading platform said this fund held in cash is not currently tagged in the restructuring plan and will be disbursed to users over time. The firm said it will not interfere in how this fund is used unless there is a suspicious withdrawal attempt from users.

Despite the ongoing threats to Voyager Digital’s executives and their families, Marcus said the firm is highly committed to finding a resolution that will work for all.

“We are focused on a path forward,” Marcus said. “It is not correct to think that there is no hope.”

The ongoing challenge that Voyager Digital is currently facing is at best a reverberation of a series of events in the digital currency ecosystem beginning with the collapse of Terraform Labs’ algorithmic stablecoin UST and its sister token, LUNA back in May. With billions wiped out in a few days, the entire industry experienced a massive onslaught that reverberated and stirred a slump in crypto prices.

Three Arrows Capital (3AC), another hedge fund that has now been liquidated was amongst the affected companies as it had a massive exposure to LUNA. The ultimate woes of Voyager Digital were the default of 3AC to repay a loan of $650 million secured from the startup as contained in a notice of default issued last month.

It is not clear yet how Voyager Digital’s bankruptcy case will go, but it sure echoes a broader sentiment across the nascent digital currency ecosystem.