Voyager Digital Faces Data Breach During The Reopening

The reopening of the platform did not go well for Voyager Digital as it seems that it suffered a hacker attack during the process.

Bankruptcy Filing and Platform Reopening

Voyager Digital Ltd., a crypto broker, filed for Chapter 11 bankruptcy protection shortly after receiving support from Sam Bankman-Fried’s Alameda Research due to market volatility and a hedge fund’s collapse. The company reopened its platform for 30 days to allow customers to retrieve assets during the court-supervised liquidation process.

Voyager may have been hacked just as it reopened its crypto platform so that customers could recover their money, a lawyer for the bankrupt firm said https://t.co/RpFSUJQL0g

— Bloomberg Crypto (@crypto) August 1, 2023

Potential Data Breach and Scams

During the platform reopening, reports emerged of a possible data breach and scams targeting customers’ wallets. A lawyer representing Voyager mentioned that the company might have been hacked, and some customers fell victim to fraudulent schemes aimed at draining their non-Voyager wallets.Amid the bankruptcy proceedings, allegations emerged that former customers’ personal data was compromised, adding to the company’s woes.

⚠️ JUST IN: There are suspicions that Voyager’s $VGX bankruptcy might have been the result of a hack to obtain customer data – Tweet

— BecauseBitcoin.com (@BecauseBitcoin) August 1, 2023

Judge’s Disapproval and Financial Challenges

The bankruptcy judge expressed dismay at the reported scams and the challenges faced by customers during the bankruptcy process. Voyager’s financial situation was challenging, with estimates suggesting customers could recover only a fraction of what they were owed.

I can confirm, I had a phishing LETTER in the mail come in with basically all the information Voyager had of mine. Even the (nearly) exact amount I had in voyager at the time of the bankruptcy and the claim amount. Don’t know how a phisher would have that info without a hack

— Callous Cryptic (@callouscryptic) August 1, 2023

Troubles and Collapse

Voyager Digital has experienced significant growth since its founding in 2018, reaching 3.5 million users and holding approximately $6 billion in cryptocurrency assets.
The company faced significant troubles when Three Arrows Capital failed to repay $666 million in loans, leading to the suspension of trading and eventual bankruptcy filing. Despite the challenges, Voyager Digital’s customers approved the company’s Chapter 11 bankruptcy plan, with a majority voting in favor.

Partial Cryptocurrency Deposit Return

Following unsuccessful buyout attempts by Binance.US and FTX, Voyager Digital is set to return 35% of customers’ cryptocurrency deposits, providing some relief amid the ongoing bankruptcy proceedings.

Summary

Voyager Digital’s bankruptcy filing and the alleged data breach have created difficulties for customers seeking to recover their assets. The platform reopening allowed partial asset retrieval, but the financial challenges remained significant. Despite these setbacks, Voyager’s growth since its inception has been notable. As investigations continue, customers hope the approved bankruptcy plan will offer some reprieve, even if only a portion of their initial deposits can be returned.

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Lorin Tye
Copywriter, Web3 enthusiast, avid crypto regulations reader. Fan of everything digital.