Crypto lender Voyager Digital Ltd., which is currently bankrupt, has started its auction in New York. The venue for the auction is in the downtown offices of investment bank Moelis.
The auction may extend beyond Tuesday. The outcome of the offer or offers will be disclosed at a hearing scheduled for September 29.
There is a chance that the results will also be released sooner, according to Voyager’s spokesperson.
A US Bankruptcy Court Southern District of New York court document has revealed that on September 13, Moelis & Company, Voyager’s investment bank, will hold an auction for the crypto lender’s assets.
It is still unclear how many bidders will be present for the auction. The company said earlier last year that it had been contacted by 88 parties, 22 of which were actively participating in the discussions.
Interested parties have yet to be officially named, but FTX and Binance have expressed interest in Voyager’s assets.
Customers rely on auctions to recover their frozen funds
Voyager had frozen customer funds when it went bankrupt. Voyager customers whose savings were withheld by the company are now hoping this auction will help them get their money back.
Voyager customers have been unable to access their funds since early July, particularly after a downturn in the crypto market forced the lender to suspend withdrawals and then trigger bankruptcy.
FTX, a popular crypto exchange, had offered $15 million in cash for Voyager customer information, along with an undisclosed amount for assets. This was called a “low offer” by Voyager.
Voyager is a New York-based company that listed on the Toronto stock exchange and filed for bankruptcy protection in July.
This was after the exchange received a large number of withdrawal requests.
Voyager’s investments were frozen and in some circumstances even lost value due to the massive crypto crash.
Voyager’s Ambiguous Statements
While Voyager was quite uncertain and ambiguous, the crypto lender, through its marketing policies, advertised and ensured that these cash deposits were insured by the Federal Insurance Corporation (FDIC).
This specifically led consumers to doubt. It also made many clients believe that their crypto deposits were now insured.
It was later discovered that although the platform was tied to the FDIC-insured Metropolitan Commercial Bank, the insurance failed to protect customers.
The Federal Deposit Insurance Corporation is one of two agencies supposed to provide deposit insurance to depositors of US depository institutions.
The other company is the National Credit Union Administration, which regulates and also insures credit unions.
A client reportedly said that she lost $1 million on the Voyager platform and her funds were mostly parked in a huge sum in a stablecoin, which was again supposedly FDIC-insured.