Investor confidence in the companies that support the cryptocurrency industry still in its infancy has been damaged by the failure of the Voyager Digital Ltd VYGVQ crypto platform.
Lisa Dagnoli, a mother of four from Massachusetts sold her family business at the height of the COVID-19 pandemic. The business, which took 24 years to build, was the culmination of her family’s “blood, sweat and tears,” Dagnoli stated in a court document.
After selling the business, Dagnoli took about half of her proceeds and used Voyager to host her funds.
“I have four children aged 16 years, 12 years, 11 years and 8 years old, currently. That money was an investment into their futures to pay for their college. I put over $350,000 into USD Coin because of the promises of ‘safety and security,’ from Voyager,” Dagnoli wrote.
“I also put over $700,000 more in Bitcoin and Ethereum that are now decimated, but that’s on me. I take responsibility for investment and risk, but the Voyager leaders and Voyager Digital need to take responsibility for giving us back what we are due, in full.”
Voyager is the latest victim of the Terra LUNA/USD cryptocurrency crash and has frozen customer funds after suspending all activity on its platform in connection with Three Arrows Capital’s (3AC) default and liquidation.
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In its bankruptcy filing, Voyager reported it has more than $110 million of cash and owned crypto assets on hand. It has about $1.3 billion of digital assets on its platform, 50% of which include claims against 3AC.
Travis, who did not want to reveal his last name, is a skeptical 38-year-old man from North Dakota who was told about Voyager in April 2022. He was told the story of great yields for holding crypto and stable coins on Voyager’s platform.
“After all, what could go wrong? It’s a U.S. company and publicly traded,” Travis said in his letter to the judge.
A lot went wrong and Travis is now out of his family’s life savings of $138,000.
“I was unaware of Voyager’s fraudulent lending practices as well as their financial situation. I now have over $138,000 of my family’s life savings tied up on the platform and am in jeopardy of losing,” he said.
“I have barely spoken with my wife as she is extremely disappointed in the decisions I made for our family. Why should I take the blame and suffer for some careless mistakes made by a few corporate individuals?”
Travis added, “[this is] crazy and painful, I hope for a quick resolution.”
Voyager told its customers that operations were normal up until it announced it was pausing withdrawals, but Alireza Johartchi had problems withdrawing her cash balance of $193,585.89 back in April, just days before the crypto crash.
“I have sold all my crypto assets in April of 2022 and attempted to withdraw my cash of $193,585.89 and for reason of compliance review they have blocked my withdrawal and when I asked as to what the issue is or what is the reason of compliance review, they never provided me of a reason,” Johartchi said in a court filing.
“Your honor I hope you can see that my claim is fair and should have been honored in May and they dragged me on in the name of compliance review and locked my account. I ask your honor to make them pay my money back since they purposely blocked my account and held my money hostage.”
Voyager’s customers are left wondering if they’ll ever be given a chance to reclaim their digital currency.
Gerardo Pedraza sent a letter to Judge Michael E. Wiles in a court filing, asking for help to “recover [Voyager customer] savings and punish who have intentionally deceived [them].”
“I believe it is impossible for Voyager to restructure and move the company forward as they have defrauded their customers and impacted their lives in so many ways. Chapter 11 [bankrputcy] will mostly benefit Voyager, not the customers,” Pedraza said in the letter.
“How can customers stay with them when Voyager said customers do not own their assets — Please help us recover our savings and punish who have intentionally deceived us.”
Disclosure: Benzinga CEO Jason Raznick is a member of the unsecured creditor committee in the Voyager Digital bankruptcy case.
Photo: mundissima via Shutterstock
Image and article originally from www.benzinga.com. Read the original article here.