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Bankrupt cryptocurrency firms FTX Trading and Voyager Digital Holdings have reached an agreement to settle their loan disputes, aiming to reimburse creditors.
The resolution, finalized on Tuesday, will release the entire $445 million, including interest, to Voyager, bringing an end to their longstanding disputes.
Voyager’s financial struggles were exacerbated by the collapse of the crypto hedge fund Three Arrows Capital, to which Voyager had loaned approximately 60% of its holdings.
FTX filed a motion on Tuesday in a Delaware bankruptcy court to seek approval for the deal, which provides mutual releases, resolving all claims and disputes between Voyager and FTX.
The legal battle began with a cryptocurrency loan that Voyager extended to Alameda Research Ltd., an FTX subsidiary, in October 2021. In January last year, Alameda and FTX initiated an adversary proceeding against Voyager to recover loan repayments. Voyager retaliated by filing proofs of claim totaling $130 million against FTX in June 2023, alleging breaches of the October 2021 loan agreement.
Following the settlement, both firms have agreed to cease further legal action against each other, subject to specific conditions outlined in the filings.
The agreement with FTX brings hope for investors who have faced difficulties due to their cryptocurrencies being locked up on the Voyager platform.
The settlement will release $450 million, plus interest, in the near term, allowing for a second distribution to creditors in the coming months.
In addition, creditors have been cautioned to remain vigilant against fraudulent activities falsely associated with Voyager. Measures have been implemented to address and mitigate these fraudulent incidents.
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