Voyager Digital Holdings Inc., one of the crypto firms to halt withdrawals due to turbulent market conditions, has been granted approval to pay $270 million in customer cash, settling a significant issue it faced after filing for bankruptcy a few weeks ago.
Judge Michael Wiles of the U.S. Bankruptcy Court in New York, also in charge of the firm's bankruptcy case, ruled Thursday that Voyager has put forth a "sufficient basis" to support its intention of repaying its customers, The Wall Street Journal reported Thursday.
Voyager will now be allowed to access the custodial account in the Metropolitan Commercial Bank where the firm held $270 million at the time of Chapter 11 bankruptcy filing on July 5.
According to a July 15 report, Voyager asked the court to honor customer withdrawals. The firm also asked for the liquidation of crypto accounts with a negative balance.
Metropolitan Commercial Bank gave its support to Voyager's request in a filing, asking the court to allow "customers to withdraw funds rightfully owing to them, and ensure the sufficiency of such funds in the account.”
Customers lost access to their funds when Voyager and crypto lending firm Celsius shut off withdrawals in the past few weeks. The two firms hired the same legal representatives, Kirkland & Ellis, to advise its restructuring.
Moreover, according to the Celsius updated FAQ blog, the customers will not be able to withdraw their assets.
"On June 12, 2022, we made the difficult but necessary decision to pause withdrawals, Swap, and transfers on our platform to stabilize our business and protect our customers. Most account activity will be paused until further notice. Celsius is not requesting authority to allow customer withdrawals at this time," Celsius added.