Voyager Digital files for bankruptcy | Hacker News Reader

Voyager Digital files for bankruptcy

techcrunch.com

85 pointsjeremylevy14 comments

This is a personal hobby horse of mine, but where is the scrutiny regarding the various advisory firms that are now managing the restructuring / bankruptcy process?

The Consello Group in particular is interesting. It's led by an ex-Clinton staffer that left their last firm following multiple sexual assaults, and it's got Tom Brady listed as a partner, who has been trying to dump crypto on retail investors for several years now. I suppose it's fine that these characters now get a pay-day from the collapse of Voyager?

This is crazy... Where do you get all this info

https://www.coppolacomment.com/2022/07/the-sinking-of-voyage... posted on hn in the past few days is an excellent read about voyager and in particular explains the whole FDIC insured claim, how it was technically true but also quiet useless.

What a surprise! /s

But on a more serious note, how will the money stored in the "FDIC-insured" omnibus accounts handled, assuming that the Chapter 11 bankruptcy becomes a Chapter 7 bankruptcy case?

It's not FDIC insured against Voyager failing, it's only insured against Contintental Bank failing. Continental Bank hasn't failed, so it will be treated like any other asset that Voyager has.

It was listed as an asset on their balance sheet, likely to be distributed the same way the rest of the assets will be.

And in case anyone is confused, none of that was FDIC insured. Only if the Metropolitan bank was to shut down would the FDIC reimburse anything.

> it had between $1 billion and $10 billion in assets

That makes one think: real assets or highly depreciated speculative crypto assets?

"between $1 billion and $10 billion in assets so volatile that we can't nail down their value more precisely than that"

That is a checkbox on the bankruptcy form, it’s not a free text field.

These guys were operating in the US as a fake bank, without getting a bank charter?

So, it is ok to take deposits, mislead depositors into thinking said deposits are FDIC insured, and invest deposits into unsecured loans?

How is this not jail time? Am I missing something?

Maybe you're not missing something, just the industry has grown explosively and law hasn't caught up to the mayhem, from what i can figure.

Is the restructuring kind of bankruptcy or the kind where they cease operations forever and layoff their entire staff?

It's a Chapter 11 bankruptcy, which can technically be both. Voyager claims that it's a restructuring, but I personally suspect it's going to turn into a liquidation -- there's really nothing left to rebuild.

Somehow, this didn't get publicized much:

"On 3/29/2022, Acting New Jersey Attorney General Matthew J. Platkin announced that the New Jersey Bureau of Securities has issued a Summary Cease and Desist Order to stop a Jersey City-based financial services company from selling unregistered securities in the form of interest-earning cryptocurrency accounts that have raised at least $5 billion nationwide."[1]

So, since March, they've been operating illegally. They were supposed to stop by April 29th.

It will be interesting to see if New Jersey handles this like they usually do with organized crime.[2]

[1] https://www.nj.gov/oag/newsreleases22/Voyager%20Summary%20Or...

[2] https://abcnews.go.com/US/doj-calls-organized-crime-alive-al...

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