Bankrupt cryptocurrency firms FTX Trading and Voyager Digital Holdings have reached a settlement in their loan disputes, which will help to reimburse creditors. The dispute between the two parties, which has been ongoing for some time, was finally resolved on Tuesday, resulting in the full release of $445 million to Voyager, including interest. Voyager’s crash was exacerbated by the collapse of the crypto hedge fund Three Arrows Capital, to which Voyager had loaned about 60% of its holdings. FTX filed a motion in a Delaware bankruptcy court seeking approval for the deal, which includes mutual releases resolving all claims and disputes between Voyager and FTX.
The initial conflict between FTX and Voyager stemmed from a cryptocurrency loan that Voyager had made to Alameda Research Ltd., an FTX subsidiary, in October 2021. In January of the following year, Alameda and FTX filed a lawsuit against Voyager to recover loan repayments. Voyager, in turn, filed claims against FTX for $130 million in June 2023, alleging that Alameda had breached the terms of the loan agreement. Following the settlement, both companies have agreed not to pursue further action against each other, subject to certain conditions as specified in the court filings.
The resolution of the dispute with FTX brings hope for investors who have been affected by the situation and had their cryptocurrencies held on the platform. According to Voyager’s legal counsel, the settlement reached with FTX is a favorable outcome for Voyager creditors, considering the risks, expenses, delays, and market uncertainties associated with continuing the litigation. As a result of the settlement, $450 million, plus interest, will be released in the near-term, allowing for a second distribution to creditors in the coming months. The filing also warned creditors to be cautious of potential scammers posing as Voyager, as fraudulent activities targeting Voyager creditors have been reported.
The successful agreement between FTX and Voyager is a positive development for both companies and their respective creditors, as it allows for the resolution of a longstanding dispute and the release of funds to repay creditors. The settlement provides a path forward for both FTX and Voyager to move past the legal issues that have been hanging over them, with the mutual releases included in the deal bringing closure to the claims and disputes between the parties. Overall, the resolution of the loan disputes signifies progress towards stabilizing the financial situation of both companies and addressing the concerns of their stakeholders, including creditors who have been awaiting reimbursement.
