Voyager Digital is deciding not to pursue legal action against company executives who green-lighted the sizable loan contributing to the demise of the crypto lending platform.
The troubled firm filed for chapter 11 bankruptcy in July after the now defunct crypto hedge fund Three Arrows Capital (3AC) defaulted on a crypto loan valued at $935 million in April 2022 and now worth around $650 million as a result of the bear market.
Reuters reports that despite the losses, Voyager’s board of directors opted to settle claims against the company’s chief commercial officer Evan Psaropoulos and CEO Stephen Ehrlich, who approved 3AC’s loan based on a one-page summary claiming that the hedge fund has $3.729 billion worth of crypto assets.
Citing court documents, the report says that Voyager is not pursuing litigation against the two executives, who continue to hold their leadership positions in the company.
The firm says taking things to court will not be cost-effective. Ehrlich will instead pay Voyager $1.125 million and the company will pursue recovery of up to $20 million from insurance policies.
Voyager reasons that it will shoulder higher legal costs and end up with lower recovery from insurance policies if it chooses to recover more from Psaropoulos and Ehrlich’s personal assets.
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