Bloomberg reported Aug. 1, that bankrupt crypto firm Voyager may have fallen victim to a cyber attack when withdrawals were briefly reopened for users,
That report cited Voyager lawyer Darren Azman, who said the firm allowed customers to withdraw their assets for 30 days amidst bankruptcy proceedings. Customers withdrew $490 million, or 80% of possible withdrawals, during that period.
Although Azman did not directly associate the user withdrawals with potential attackers, he acknowledged that Voyager customers were subsequently targeted by scams aiming to infiltrate their wallets. Scammers typically set up a counterfeit website that claims that Voyager customers can increase their payout by connecting their non-Voyager crypto wallets to a fresh account. Once the Voyager customer creates a new account, the attacker can empty the non-Voyager wallets.
Despite the potentially severe costs of such attacks, Azman said that the scam had victimized very few customers.
Commenting on the situation, U.S. Bankruptcy Judge Michael Wiles called the incident “disgraceful” and expressed sympathy for the creditors.
The suspected security breach has been reported to law enforcement agencies and is under investigation by bankruptcy officials tasked with the company’s closure.
Voyager bankruptcy continues
Though Bloomberg did not specify the withdrawal period and date of the hack, the company is known to have reopened withdrawals around June 23.
Voyager suspended withdrawals and filed for bankruptcy in mid-2022 due to a broader crypto lending liquidity crisis that impacted the sector during the summer. The firm’s bankruptcy process was prolonged as it failed to arrange buyouts with Binance.US and FTX.US, though it reached agreements with FTX on a $445 million loan and redeemed other assets in early 2023.
Bloomberg said that, in April, Voyager owed about $1.8 billion to creditors but had just $630 million of accessible funds. Users were expected to receive 36% to 60% of their dues, depending on how the above issues played out.
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