The collapse of the crypto market has pushed several crypto lenders into bankruptcy. So does Voyager Digital. But as a user reported in court, the crypto company would still have accepted purchase orders – even after it stopped payments.
Investors in crypto broker Voyager Digital came as shocked when the crypto payments service provider froze its customers’ funds on July 1, 2022. The company went bankrupt a short time later, and customers of the crypto lender have been worried about their savings ever since.
In the case of crypto trader Shaik Taj Baba, however, the situation is a little more complex. He is also one of the people who have entrusted their money to Voyager Digital. Nevertheless, he is fighting before the bankruptcy court with a special concern.
Voyager Digital customer successfully places buy order after payment freeze
For example, on July 1 at 2:07 p.m. ET, Baba bought 10,000 tokens of stablecoin USDC from Voyager Digital using $10,000 in cash holdings, which he planned to withdraw from the platform thereafter. The buy order went through, and Baba was now in possession of $10,000 worth of USDC coins. However, when the user tried to transfer the stablecoins to an external wallet a few minutes later, the transaction was rejected by Voyager Digital. Shortly thereafter, the crypto broker went public with the payment freeze, which the company completed at 2 p.m. But then, seven minutes later, how could Baba successfully place a buy order?
“Why did you execute my buy order?” the crypto user asks in an interview with CoinDesk. After all, trading as well as deposits and withdrawals had already been stopped at the time. If all activities had actually stopped after 2 p.m., the purchase order should also have been rejected. He shouldn’t have been able to invest his money in stablecoins. However, when he asked the crypto broker for support, Baba fell on deaf ears. When asked why the crypto transfer (to the external wallet) didn’t go through, he was told that he made the order at 2 p.m. after the platform closed, to which Baba stated that then the purchase would have -Orders not allowed go through.
Shaik Taj Baba appeals to the bankruptcy court for help
For this reason, the Voyager customer is now trying to get his $10,000 back from the bankruptcy court. For example, Baba filed a motion with Bankruptcy Judge Michael E. Wiles, requesting that the buy order that was placed after the payment freeze be reversed or that the 10,000 USDC stablecoins be transferred to an external wallet become possible.
It’s not the only money the Voyager customer deposited with the crypto broker. According to Baba, he has invested a total of USD 32,000 in cryptocurrencies, but he is only asking the court to return the USD 10,000 transferred after the payment was stopped.
Short time window caught
As the crypto investor reported to CoinDesk, Voyager’s bankruptcy lawyers justified the purchase order that went through in such a way that Baba’s order caught the short period in which Voyager stopped withdrawing and buying. The crypto broker would have implemented a “definitive blocking” of transfers, but the order system would have required “a gradual shutdown”, which would still have made it possible to execute purchase orders.
However, Baba clearly sees the mistake in the crypto platform and does not want to have to pay for it. Eventually, Voyager would have accepted his money “but not given it out”. It is not yet clear how the case will end. More than 100,000 Voyager customers are still waiting to see some of their savings back.