Voyager app set to reopen for customer withdrawals as soon as June 20

June 15, 2023 Coin Telegraph

3AC

Customers will soon be able to load up the Voyager app and see how much will be available for withdrawal.

Cryptocurrency brokerage Voyager Digital is preparing to reopen its app and allow customers to finally withdraw their funds — nearly one year after it filed for Chapter 11 bankruptcy.

Voyager's bankruptcy plan administrator Paul Hage said in a June 14 court filing that around June 15 the Voyager app would be updated to show the amount available for withdrawal, and estimated that the withdrawal period would start somewhere between June 20 and July 5.

The bankruptcy plan was first approved in court on May 17 and will result in customers initially receiving 35.72% of their claims by withdrawing crypto through the Voyager app or in cash after 30 days.

Voyager Court adjourned for the day
Fee examiners findings approved by the judge
App will come back online on or around 15 June
Estimated window for withdrawals opening 20 June to 5 July
30 days to withdraw once window opens
all creditors will receive 35.72 initial…
— Neville (@neville_p) June 14, 2023

Within the filing, Hage also noted that bankrupt crypto hedge fund Three Arrows Capital still owes Voyager $650 million, so while this first tranche of withdrawals allows for just over 35% of customer funds to be withdrawn “the primary focus will shift to recovering additional assets that can be distributed to creditors” once the initial distribution is completed.

Additionally, an extra $445 million of customer funds could also be made available to creditors pending a final resolution of Alameda Research’s preference claim against Voyager, which is not expected to happen until at least mid-September 2023.

Meditation between @investvoyager and @FTX_Official is anticipated to not start until Fall 2023

Anything less than 100% return would be a devastating result for Voyager creditors! pic.twitter.com/Y6IDAOgeT7
— EthDaddy ‍☠️ (@ETHjuiced) June 14, 2023

After originally filing for bankruptcy on July 5, Voyager had submitted two prior bankruptcy plan proposals but both had fallen through.

The first of these was to the United States arm of FTX, FTX.US, but the $1.4 billion deal fell through after FTX filed for bankruptcy.

Subsequently a $1 billion deal with Binance.US also fell through after it backed out on April 25, citing a “hostile and uncertain regulatory climate in the United States.”

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Metropolitan Museum of Art to return $550K in donations from FTX

June 5, 2023 Coin Telegraph

Metropolitan Museum of Art to return 0K in donations from FTX

Bankruptcy Court

The agreement came on the back of “good faith, arm’s length negotiations” with FTX’s debtors, the museum said.

The Metropolitan Museum of Art (Met) is set to return $550,000 in donations it received from crypto exchange FTX prior to its collapse in November.

The New York-based museum confirmed its intention to repay the funds to FTX debtors in a filing to the United States Bankruptcy Court in Delaware on June 2 — the same court where FTX commenced its bankruptcy proceedings.

*Filing from the Metropolitan Museum of Art. Source: CourtListener*

The Met said the agreement came on the back of “good faith, arm’s length negotiations” with FTX’s debtors:

“The Met wishes to return the Donations to the FTX Debtors, and the FTX Debtors and the Met have engaged in good faith, arm’s length negotiations concerning the return of the Donations.”

The $550,000 was paid to the Met in two separate installments — the first $300,000 was paid in March 2022 while the additional $250,000 came two months later in May.

The donations were facilitated by West Realm Shires Services, the firm that operated FTX.US.

FTX’s management has been seeking to claw back its donations from politicians and other organizations since December, about a month after it filed for bankruptcy in Delaware.

FTX handed out $93 million in donations between March 2020 and November 2022, according to court documents.

Of the 180 United States or so politicians to have recieved funds from FTX, only 19 have returned their funds or have signalled their intention to do so, according to data from Unusual Whales.

BREAKING: FTX founder Sam Bankman-Fried is charged with more than 300 illegal political donations.

He has given $42 million to Democrats & "dark money" to Republicans.

But there hasn't been a full list of the politicians.

Until now.

Click here to see: https://t.co/araVgIsCG3 pic.twitter.com/CezXTKq7cQ
— unusual_whales (@unusual_whales) February 23, 2023

“Protect our Future PAC” was the largest recipient of FTX, taking in about $27 million, according to data from Market Watch.

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FTX leadership sues Sam Bankman-Fried over $220M deal made prior to bankruptcy

May 18, 2023 Coin Telegraph

FTX leadership sues Sam Bankman-Fried over 0M deal made prior to bankruptcy

Alameda

When FTX tried to sell the platform after filing for bankruptcy, the top bid was for just $1 million, representing a 99.5% decline in value.

FTX lawyers are suing former CEO Sam Bankman-Fried, co-founder Zixiao Wang, and former senior executive Nishad Singh over the $220 million acquisition of stock-clearing platform Embed, alleging lack of due diligence.

According to a May 17 filing, FTX had paid $220 million to acquire Embed through its United States subsidiary after having allegedly “performed almost no due diligence” on the platform.

After FTX filed for bankruptcy, the judge in charge of the proceedings approved the sales of Embed and other assets of FTX, but the top bidder for the platform offered just $1 million, with FTX’s lawyers stating:

“The bidders had figured out what the FTX Group and FTX Insiders did not bother to assess prior to the Embed acquisition, namely, that Embed’s vaunted software platform was essentially worthless.”

While 12 entities had submitted non-binding indications of interest — the largest of which was $78 million — all but one declined to submit a final bid after conducting more comprehensive due diligence: Embed’s founder and former CEO, Michael Giles.

According to FTX’s lawyers, Giles had “personally received approximately $157 million in connection with the acquisition,” but his final bid to regain ownership of Embed was a paltry $1 million, subject to reductions at closing.

The lawyers additionally accused the FTX insiders of taking “advantage of the FTX Group’s lack of controls and recordkeeping to perpetrate a massive fraud” by using misappropriated customer funds to facilitate the purchase of Embed, while fully aware that the company was insolvent when finalizing the deal.

The lawyers further alleged that misleading records were created to obscure Alameda Research’s role in funding the Embed acquisition, claiming funds had been transferred between FTX entities, not from Bankman-Fried, Singh and Wang as claimed.

*A screenshot from the filing shows a visualization of the flow of funds according to FTX lawyers. Source: Kroll*

FTX wants the transactions to be labeled as “avoidable fraudulent transfers and obligations, and/or preferences,” in addition to having claims made by the defendants disallowed until FTX can recoup the funds lost through avoidable transfers.

FTX filed for bankruptcy on November 11, 2022, and since then, its new leadership has been focused on clawing back funds to repay customers and creditors. It has also been considering a possible relaunch of the exchange.

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Lawsuit against FTX celebrity promoters gets backup from former exec

May 12, 2023 Coin Telegraph

Brady

Daniel Friedberg, the former top compliance chief for FTX and FTX US, has provided a declaration that could support the lawsuit.

A class action lawsuit against celebrities who allegedly promoted the now-bankrupt FTX has scored the cooperation of a former exchange executive — ex-compliance chief Daniel Friedberg.

A May 11 proposed amended complaint filed in a Florida District Court from the class action lawyers said Daniel Friedberg provided evidence that promotional activity for FTX originated from Florida.

Friedberg was the chief regulatory officer at FTX and the chief compliance officer of FTX US, the exchange's United States arm.

The declaration could potentially rebut a key defense made by some of the defendants who claimed the Miami court has no jurisdiction and the claims have no association with Florida.

In sworn testimony, Friedberg said FTX US’ vice president of business development, Avinash “Avi” Dabir was based in Miami and was in charge of brand ambassadors for FTX, including defendants in the case — which include former basketball player Shaquille O’Neal, comedian Larry David, retired NFL player Tom Brady and FTX founder Sam Bankman-Fried.

We couldn't keep it secret any longer! We're partnering with...the one...the only...@SHAQ! (a.k.a. Shaqtoshi) pic.twitter.com/V37UQ5wsXI
— FTX (@FTX_Official) June 1, 2022

He said Dabir operated from an FTX office in Miami “early in 2021.” The class action lawyers said this refutes the arguments made by the defendants in their motions to dismiss.

Some of the alleged promoters claimed that “no conspiracy could have been ‘engineered in Florida’ because FTX did not even plan to move to Miami until late September 2022” which was before they entered into the alleged promotional agreements.

The class action lawyers are using the new evidence to amend their lawsuit to try to address the jurisdictional claims by the suit's defendants.

The court will decide if the evidence is sufficient.

The suit was first filed in mid-November shortly after the collapse of the exchange. Other alleged celebrity promoters include Brady’s then-wife and model Gisele Bündchen, entrepreneur Kevin O’Leary, and basketball star Steph Curry along with his team the Golden State Warriors.

We’re proud to announce Tom Brady will serve as an FTX Ambassador, and Gisele as FTX’s Environmental & Social Initiatives Advisor.

“We have the chance to create something really special here.” says the Super Bowl Champion and entrepreneur @TomBrady https://t.co/yDLC1Q1KFG
— FTX (@FTX_Official) June 29, 2021

Friedberg was also named as a defendant in an amended complaint on Dec. 16.

The former compliance head has reportedly lent a hand to other legal proceedings against the exchange he used to work for.

Investigators with the New York District Attorney, the Justice Department, the Federal Bureau of Investigation (FBI) and the Securities and Exchange Commission (SEC) purportedly got details about FTX from Friedberg a few weeks after the exchange collapsed.

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April 27, 2023 The Daily Hodl

FTX lawyers: Examiner could cost $100M and ‘provide no benefit’

January 26, 2023 Coin Telegraph

FTX lawyers: Examiner could cost 0M and ‘provide no benefit’

bahamas

FTX lawyers, joint provisional liquidators of FTX.US and the Bahamas and a committee of creditors have all opposed the appointment of an independent examiner.

An investigation into FTX’s collapse by an examiner could cost the firm upwards of $100 million without providing any benefit to creditors or equity holders, argues lawyers representing the bankrupt crypto exchange.

The arguments were part of a Jan. 25 objection to a motion from the United States Trustee in December, which called for the judge to appoint an independent examiner to ensure any investigations are transparent and their findings made public.

This will be fascinating.

4 Senators submitted a letter asking for an Independent Examiner. Will they do more?

Several States have entered the FTX case. Will they lend support for an Examiner?

The SEC asked for the Independent Examiner in Enron. Will they say anything here? https://t.co/KiSZKYonCD
— MetaLawMan (@MetaLawMan) January 26, 2023

FTX lawyers argued that creditors would not benefit from an examiner investigation which duplicates investigations led by FTX’s CEO John J. Ray III, a committee of creditors, law enforcement agencies, and congress, adding:

“The appointment of an examiner, with a mandate to be determined, can be expected to cost these estates in the tens of millions of dollars. Indeed, if history is a guide, the cost could near or exceed $100 million.”

The creditors committee, also known as The Official Committee of Unsecured Creditors, submitted their own objection to the appointment of an independent examiner on Jan. 25, also citing the prohibitive costs involved and the investigations of various parties which are already underway.

In the original motion, the U.S. Trustee had noted if the court was concerned about the duplication of work, it could allow the examiner to access existing work, adding:

“An examiner may also allow for a faster and more cost-effective resolution of these cases by allowing Mr. Ray to focus on his primary duty of stabilizing the Debtors’ businesses while allowing the examiner to conduct the investigation.”

Joint provisional liquidators in the Bahamas and FTX.US also opposed the appointment on Jan. 25, pointing to a section of the bankruptcy code which allows the judge to appoint an examiner “as is appropriate,” and arguing that the unnecessary costs and delays which would accompany the appointment of an examiner renders it “inappropriate.”

The appointment of an independent examiner has been a key topic throughout FTXs bankruptcy trial.

On Dec. 9 a group of four U.S. senators which included Elizabeth Warren wrote an open letter to Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware, claiming that FTX’s counsel Sullivan & Cromwell had a conflict of interest in the case and cast doubt over their ability to provide findings which inspire confidence.

However, the judge ruled on Jan. 20 that there were no potential conflicts of interest sufficient to stop the law firm from continuing to act as FTX’s counsel.

The judge will decide whether to accept the appointment of an independent examiner in a court hearing on Feb. 6.

Independent examiners are often appointed by bankruptcy courts to investigate details of complex cases brought before them, and have been appointed in other high-profile bankruptcy cases such as Lehman Brothers during the subprime mortgage crisis and the crypto exchange Celsius.

FTX.US