Bitcoin....who's gotten into it?

[SumJongGuy]

That article says Voyager has also gone belly up, "filed for bankruptcy" going down with the Shipto..

[NakedShorts]

From my email from Voyager....


Dear customer,

Last Friday, Voyager presented what are referred to as “First Day Motions” as part of our Chapter 11 filing to the U.S Bankruptcy Court. We were granted the relief requested. This was the first step in the restructuring process, which is intended to address the company’s financial circumstances and allow us to resume normal operations.

We know you have many questions, and we are moving swiftly to give you answers. Below and in this more detailed blog post, we’ve tried to respond to your most pressing inquiries.

How does the reorganization process impact my cash?

We are working to restore access to USD deposits. Customer USD belongs to customers and will return to those same customers, subject to a reconciliation and fraud prevention process.

Is the USD in my account FDIC insured?

Yes. USD in your Voyager cash account is held at Metropolitan Commercial Bank of New York (“MCB”) and is FDIC insured. That means you are covered in the event of MCB’s failure, up to a maximum of $250,000 per Voyager customer. FDIC insurance does not protect against the failure of Voyager, but to be clear: Voyager does not hold customer cash, that cash is held at MCB.

What will happen to the crypto in my account?

Voyager currently has approximately $1.3 billion of crypto assets on its platform, plus claims against Three Arrows Capital ("3AC") of more than $650 million (it fluctuates due to the exchange rate between Bitcoin and USD).

Under Voyager’s proposed reorganization plan, which is subject to change and requires Court approval, customers will receive a combination of the following, with the ability to select the proportion of crypto and common equity they receive, subject to certain maximum thresholds:

Pro-rata share of crypto;
Pro-rata share of proceeds from the 3AC recovery;
Pro-rata share of common shares in the newly reorganized Company; and
Pro-rata share of existing Voyager tokens.

Can you tell me how much of my crypto I’ll get back?

At this stage, we are proposing that customers will receive their crypto as described above. However, the exact numbers will depend on what happens in the restructuring process and the recovery of 3AC assets. We understand how important this issue is and will provide updates as soon as possible.

Luckily for me we are only talking about hundreds of dollars.

[4matic]

Voyager customer crypto holdings are subject to market value? So if market goes lower their value also goes lower.

[Mustonen]

Voyager customer crypto holdings are subject to market value? So if market goes lower their value also goes lower.

How else might it work? Would forcing them to convert those assets to something a little more stable be a reasonable step? Just cash everybody out?

[neufox47]

How else might it work? Would forcing them to convert those assets to something a little more stable be a reasonable step? Just cash everybody out?

I would have expected them to cash everything out as soon as the bankruptcy process started.

[4matic]

How else might it work? Would forcing them to convert those assets to something a little more stable be a reasonable step? Just cash everybody out?

Mark to market when their accounts were frozen.

[jono]

Mark to market when their accounts were frozen.

In what currency?

[Mustonen]

Yeah, that has me scratching my head a bit. Forced liquidation when accounts are frozen would make some intuitive sense, but the underlying “asset” is so volatile that marking it to market could have little bearing on reality when it’s time to actually do the thing.

[4matic]

In what currency?

Whatever it was in. Not gonna happen. That’s kinda my point. The overhead to sell frozen crypto assets from several players is worrisome: 3AC, Voyager, Celsius, bitfinex

[JimmyCarter]

Yeah, that has me scratching my head a bit. Forced liquidation when accounts are frozen would make some intuitive sense, but the underlying “asset” is so volatile that marking it to market could have little bearing on reality when it’s time to actually do the thing.

The idea being they had that amount when they were fucked so that's what they're owed to make them whole. But while they'll be owed an amount based on that mark, payout will likely be a % of that depending on what value there is to recover in bankruptcy.

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[J. Barron DeJong]

Celsius filing for bankruptcy:



https://twitter.com/silvermanjacob/s...mBteHuiaQpr4Dw

Best of luck, shera.

[J. Barron DeJong]

https://twitter.com/ben_mckenzie/sta...53rR9L_N2YEWag

[shera]

Files Voluntary Petitions for Chapter 11 Protection
https://www.businesswire.com/news/ho...l-Stakeholders

[shera]

So I'm trying to understand the outcome of Chapter 11, here's some thoughts on the Voyager situation from Scott Melker (he's got a lot of assets stuck on Voyager)

The Voyager Saga Continues

I have done an extremely deep dive into the Voyager Chapter 11 filing, reading it in its entirety and speaking to lawyers, people close to the situation and others with knowledge of similar proceedings.

I have come to the conclusion that almost everything being presented on social media is purely false interpretation, lack of understanding, or half truth based on facts that are taken out of context.

Your favorite analysts are throwing out random facts and statistics about debts owed and corporate moves that are meaningless without context.

Welcome to the world where everyone is an expert on everything.

I do not blame them, but advise that you dive in yourself and gather as much information as possible before drawing conclusions. The same goes for what you read here.

Everything I am writing here is based on public information that I felt was pertinent. I have no more base information than the public. I have merely sought multiple professional opinions of what has been shared and am sharing then with you.

In Voyager’s PR announcements, they have stated that there are up to 20 potential strategic partners taking a look at the company. This would indicate that a buyout, partnership or other restructuring with another entity is on the table. This can happen in a number of ways, so it’s not worth taking guesses. Many obviously believe this could be Alameda and SBF, who are now at the top of the unsecured creditors list due to Voyager drawing 75M of the credit line that was provided. That is pure speculation, as there is clearly more than 1 potential interested party.

Remember, Voyager has 1.2M customers and had a vibrant business as a broker dealer before ever offering yield. I started using the platform in 2019 for this reason - because they sourced liquidity from multiple exchanges and it was easy to use. They did not even offer yield, so there was a viable business there without any of the loan nonsense.

So why file Chapter 11? While the word “bankruptcy” is scary, all filings are not created equal. Chapter 11 is specifically for companies that intend to restructure and reorganize and is not appropriate for companies looking to liquidate.

The companies that Voyager has hired to assist, including the lawyers and new advisors and directors are all specialists in restructuring businesses to move forward as viable companies. None of them are specialists in liquidations.

Whatever happens, it is clear that the intention here is for Voyager to move forward, not liquidate. That does not mean they will succeed.

There are a number of reasons to file Chapter 11. The most likely in this scenario is to give Voyager protection while they restructure, and to offer concrete assurances to interested parties that there are no significant claims against the company. All existing liabilities are dealt with during the process, and no new liabilities can be added.

By filing immediately after suspending withdrawals, they closed the window on lawsuits and claims from the public or other counter parties. That means that they are free and clear to restructure and that a company looking to buy them would do so with a clean slate. This is very common and is actually preferred by many companies who are looking to buyout a competitor. It’s effectively a rubber stamp from the government for a clean bill of health coming out the other side. It forces due diligence in the process and saves massive headaches for the suitor.

Every person I have spoken to who is an expert in Chapter 11 has immediately referenced a “stalking horse plan.”
A stalking horse bid is an initial bid on the assets of a bankrupt company. The bankrupt company will choose an entity from a pool of bidders who will make the first bid on the firm’s remaining assets. The stalking horse sets the low-end bidding bar so that other bidders can not underbid the purchase price. This entity can be the company itself.

What is EXTREMELY likely is that the plan presented yesterday by Voyager is their stalking horse. If you have not read it, here is the summary from CEO Stephen Ehrlich.
Stephen Ehrlich
Stephen Ehrlich
@Ehrls15

Voyagers, today we began a voluntary financial restructuring process to protect assets on the platform, maximize value for all stakeholders, especially customers, and emerge as a stronger company. Voyager will continue operating throughout.
https://t.co/TxlO4eua8E
1:14 AM - 6 Jul 2022

Twitter is having a field day with this press release, based on the false assumption that this is THE plan, rather than just A plan.

What does this mean for holders?

What is presented above is effectively the worst case scenario, and at current crypto prices would likely result in customers getting 60-70 cents on the dollar on crypto assets held on the platform. This could change if the crypto market moves significantly or if more information on the balance sheet comes to light.

When they filed Chapter 11, they had to present this stalking horse as the scenario where no deal is executed with another company and Voyager proceeds on their own through the process.

There should be NO scenario where customers lose all of their assets based on what is currently available on the balance sheet, so anything you read about your money being completely gone is false. Most analysis of the balance sheet that I have seen is completely incorrect as well.

That said, there are valid questions as to how you will be paid back.

In the worst case scenario presented above, the announcement says the following:
“Customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized Company, and Voyager tokens.”

Not ideal if you are holding BTC, ETH and other assets for the long term. I personally have almost my entire Ethereum stack that I have dollar cost averaged into for years on Voyager, and would hate to be paid back in common stock of a struggling company.

I asked experts how this would likely proceed, and they said that NOBODY knows at the moment. This would be subject to litigation and decided by a court - the court would either order that Voyager liquidate all crypto into USD and distribute cash, or pay back in kind. Remember, this is in the worst case scenario.

The best case scenario is a robust and successful partnership with a willing company and proceeding with a revamped business model. It could happen, although the likely outcome is somewhere in between. There is a reasonable chance that all assets are recovered. Voyager still has a lot of money and crypto.

https://www.getrevue.co/profile/TheW...ent=issue-card

[Vt-Freeheel]

Good luck, return is going to be somewhere on this wheel






Once Celsius pays back its loans there won't be much left for account holders. Can't see any future where they resume crazy interest rates so account closures will happen at a rapid rate leading to eventual failure?

[shera]

Ha, that wheel is great, I need a laugh. I'm telling myself the number is 80%, that I'll recover 80% eventually.

On chain indicates Celsius has paid off all defi loans. Can't really remember but maybe they have 1 billion in assets including wrapped bitcoin and staked eth so those might not be liquid. They have around 150 million in cash and requested to use that money to pay salaries and keep the lights on. They hired the same chapter 11 lawyers as voyager so maybe a similar playbook. Supposedly all the stakeholders will be presented with choices, not sure what that means. No withdrawals on the table yet and no more interest/reward payments.

80%, that's my mantra.

[Cono Este]

Ha, that wheel is great, I need a laugh. I'm telling myself the number is 80%, that I'll recover 80% eventually.

On chain indicates Celsius has paid off all defi loans. Can't really remember but maybe they have 1 billion in assets including wrapped bitcoin and staked eth so those might not be liquid. They have around 150 million in cash and requested to use that money to pay salaries and keep the lights on. They hired the same chapter 11 lawyers as voyager so maybe a similar playbook. Supposedly all the stakeholders will be presented with choices, not sure what that means. No withdrawals on the table yet and no more interest/reward payments.

80%, that's my mantra.

Never make that mistake again. First question I have for a money manager is who is your B/D?

Only thing worse than losing money in the mkt is having some dumbass lose it for you.

Should be 0% risk in that ever happening.


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[Vt-Freeheel]

Good luck Shera, hope the spin goes well for you

[summit]

It blows my mind that of all the thousands and thousands of people that these companies fuck over, not one person finds that CEO in a dark alley and kicks some ass. I'm not saying that should happen, but I'm damned surprised it hasn't.

Good luck Shera

[byates1]

Hope it works out shera!

[frorider]

In the worst case scenario presented above, the announcement says the following:
“Customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized Company, and Voyager tokens.”

Ie a shit sandwich.

I’ve said it before Shera, but I hope you don’t get burned.

[JimmyCarter]

It blows my mind that of all the thousands and thousands of people that these companies fuck over, not one person finds that CEO in a sunny villa in a non-extradition country and kicks some ass. I'm not saying that should happen, but I'm damned surprised it hasn't.

Good luck Shera

FIFY. How's your average crypto-bro going to get to Morocco?

[shera]

Thanks for the well wishes everyone, very kind of you. They don't have all my assets fortunately and I have my miners, so all is not lost. Also being deep into a bear market I am not frothing at the bit to sell, I got to sell so much last year! Now is time to put my head down, get to work and DCA. First I'm going on vacation though. :P

[shera]

Never make that mistake again. First question I have for a money manager is who is your B/D?

Only thing worse than losing money in the mkt is having some dumbass lose it for you.

Should be 0% risk in that ever happening.


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I'm still trying to digest what this means, truly. Might be trying to figure it out for the rest of my life...

[NakedShorts]

I'm still trying to digest what this means, truly. Might be trying to figure it out for the rest of my life...

Your Broker Dealer should not be allowed to Corzine your funds MF Global stylie.

SIPC protects you in traditional finance. Not peeing into the wind is your only protection in crypto.

Buying here will seem foolish when we sell off much more.

Question for a friend: will crypto be allowed to sell off or will it be a giant gated party of waterfalls? I mean if your BD steals your tokens how can most sell? So do we just get cascade after cascade as the whole coop implodes on faulty assumptions and asinine belief structure.