While Voyager Capital is going down, its employees will mint some money. A federal judge has just approved Voyager to pay up to $1.9 million to retain its employees. Who are these employees? You won’t know about them as their identity is sealed.
Key Employ Retention Plan is Critical for Voyager to Come Back after Insolvency Resolution
The latest bonus is part of Voyager’s “Key employee retention plan” in a bid to return from bankruptcy successfully. It seems that the crypto lending company is planning ahead to rebuild – stating the employee’s compensation changed as crypto winter set and depreciated their equity.
“The departure of the debtor’s key employees during the Chapter 11 bankruptcy case would destroy the company’s value and harm the debtor’s process to restructure the company. It will also make it difficult for the debtor to continue operations after an emergency,” – Voyager stated in its request for funds.
Cash Rewards are Capped at $1.9 million – or $1.6 million
While it might be a time of rejoicing among the “key management personnel” of Voyager capital, keep in mind that the cash rewards are capped at $1.9 million. 38 key will have claim to this insiders of the company, including those working in cash and digital asset management, essential accounting, IT infrastructure, and legal.
However, the federal judge has emphasized that the rewards would be close to $1.6 million as many insiders left the company as the boat started sinking. The court has also attached a companion order, stating that the details about the employees are to be sealed.
Sealing the details about the employees to receive a bonus is a great move because the social-media-driven crypto market may try to cyber bully these employees.
The Voyager Counsel has also stated that senior-level employees are not among those receiving retention money.
Voyager agrees to return $270 million to the Customers
After entering the Chapter 11 bankruptcy proceedings in early July, Voyager has halted all of its activities. The now infamous crypto lender is in the process of winding up and has recently received approval to return $270 million in cash deposits to customers.
Will the $270 million be enough for customers to recoup their losses? Probably not. While filing the bankruptcy, Voyager Capital stated that it has $350 million cash for customers and $1.3 billion in crypto accounts. However, most of this money has been utilized to go through the insolvency resolution process. Therefore, it is not likely that these customers would be able to recover 100% of their funds from Voyager Capital.
Note that Voyager has upwards of 3.5 million customers, many of whom have deposited millions on the crypto lending platform. Many customers have lost their life savings on the platform as they didn’t know the risks they were taking when investing.
People Tend to Overlook the Risks of Crypto Savings Accounts – They Shouldn’t
While Voyager Capital is hard at work – trying to revitalize its assets and return to the fold – it is less likely to gain customers’ interest within the crypto market. Many have decided to take a step back from opening crypto savings accounts, and others want to forego crypto investments altogether. But that’s not the solution. Cryptocurrency is the future of finance, and like it or not, even government bodies have started to agree.
Therefore, the better option is not to overlook the following risks when holding your Crypto in a crypto savings account.
There is no FDIC Insurance.
The government won’t compensate you if you lose your crypto earnings, unlike real cash, for which the governments have a $250k emergency funding per account in place.
Holding Crypto in a Savings account is giving up control
While a crypto savings account will allow you to earn a passive and regular income, you lose control of your money. You gain interest because the lender uses your holdings to lend to others on the platform. And if they don’t pay back, you could lose all your assets without recourse.
Withdrawal is Not an Easy Process
Withdrawing your funding from a crypto savings account is not easy. Each platform has its withdrawal limits – a negative if you need the money to deal with financial emergencies.
Annual Percentage Returns Can Reduce
The Annual Percentage Returns you gain for holding your Crypto in interest accounts are not set in stone. In a bearish market, lenders slash these interest rates – which can be detrimental to your earnings.
Conclusion
The recent permission to $1.9 million to retain its employees seems flimsy at best. The crowd sentiment towards Voyager Capital is anything but positive. In light of that, it is highly unlikely that Voyager will re-emerge as a major crypto player in the market once the dust of bankruptcy is settled. For now, our only hope is for the customers to get their funds back.
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