Bankrupt cryptocurrency exchange Voyager to pay $1.6m bonus to key staff

More than 30 employees at the bankrupt cryptocurrency exchange Voyager will receive $1.6 million in bonus pay as the company scrambles to return customers' funds frozen on its platform.  Bankruptcy Court judges in southern New York approved Voyager's request to award key staff this week. Voyager argued it needed to award top …

[Anonymous Coward]

SOP

This is, unfortunately Standard Operating Procedure in bankruptcy.

Bonuses and Golden Parachutes for the creme de la creme, spoiled milk for the victims.

I suspect that the reason they didn't provide any evidence that these people would resign is that there is zero evidence. If they were going to resign, they would have done it when the company filed for bankruptcy. Unless they were in on the scam.

[Anonymous Coward]

Re: SOP

"Bonuses and Golden Parachutes for the creme de la creme, spoiled milk for the victims."

$47k avg. per paid employee while $219m has already been repaid to customers.

[jmch]

Re: SOP

Not sure if this applies in this case, but regulated financial institutions have segregated accounts for themselves and their customers. The bonuses will be coming from company funds, not customer accounts.

I realise it's more complicated than that if the company has mismanaged client funds, of course

[Ian Johnston]

Re: SOP

Was Voyager regulated?

[KBeee]

Re: SOP

Yes. Deeply

[Nathar Leichoz]

Re: SOP

How were they regulated when Voyager was the one telling their customers that their funds were FDIC insured?

[Anonymous Coward]

Re: SOP

It's nothing unusual.

My oldest son worked for the UK department store Debenhams when they declared bankruptcy. Not only was he kept on until the administrators completed the winding up, he was paid a retention bonus if he stayed until the bitter end.

They needed to keep key staff on to keep systems running right until there was nothing more of value to be recovered. He went in to work in the office one day towards the end, and the furniture was being dismantled and removed around him.

In the case of Voyager, if the systems were shut down because the staff were no longer working there, there would be no chance to return the clients money, which is their stated goal.

[Potemkine!]

Sorry, but I don't fell bad for the ones betting on cryptocurrenshits who lose in the end.

[Pascal Monett]

What ?

"thousands of creditors struggle"

"already well-compensated employees"

I'm sorry, what's the deal here ? You have thousands of creditors ? And you declare that your employees are well paid ?

Good for you.

You still failed, which, since you were a funny money scam, is not surprising.

[doublelayer]

Re: What ?

You may be misunderstanding the quote because the creditors said that, not the business. They're saying that the creditors want their money back and that the workers are already well-compensated, so they don't need bonuses. The business has a different summary of the situation.

[Emir Al Weeq]

A bonus is a bonus

If you do well and the company does well, you get a bonus. It's not standard salary.

If you or the company under-perform than it's reduced or lost. Going bankrupt generally counts as under-performance.

[Peter Gathercole]

Re: A bonus is a bonus

When a company goes under, the first thing that happens is that the staff that can will look for other jobs.

So if you're trying to keep something going to try to sell the business, or even to complete the winding up, you have to offer the staff something to keep them. Once there is no staff, there's nothing left to the business!

[John Brown (no body)]

Re: A bonus is a bonus

And the people who are "essential" to the business are the ones most likely to be able to find another job more easily. And, I'd think, have on your CV that you stayed to the bitter end to help support the company and it's customers could look attractive[*} to future employers.

[*] depends on the future employer, of course. Some would see that as a bad thing because it shows lack of initiative and self-preservation. But then if it was me, I'd probably not want to work for a sociopathic employer anyway and prefer to work for an employer who rewards loyalty.

[Def]

The more cynical part of my brain thinks this is a basic strategy to get rid of a large number of employees without having to give them any severance packages. Reward the few employees you really want to keep, and subtly let the others know that they're not valued enough to warrant giving them a bonus.

If you were one of the ones who didn't get a bonus, wouldn't you start looking for alternative employment sooner rather than later?

[Peter Gathercole]

It depends. You should be continue to be paid up until the time that you're laid off, and once you're laid off, you're free to look for other jobs anyway.

The difference is that depending on your contract, if you're laid off, you may be entitled to a redundancy payment, whereas if you leave, you definitely won't.

[Def]

The difference is that depending on your contract, if you're laid off, you may be entitled to a redundancy payment, whereas if you leave, you definitely won't.

Which was my point. If employees feel less valued, they're more likely to look for alternative employment. Doubly so if their employer has entered bankruptcy protection.

If you want to make employees feel undervalued, and don't want to pay them redundancy, give bonuses to some of their colleagues.

[doublelayer]

As soon as they announced bankruptcy, I'd start looking and interviewing. I'd keep working there until I got something, and if they came soaring back then I'd still have the option of forgetting about the others, but a bonus wouldn't change that plan. I'd accept it happily, but I'd still assume that this wouldn't end well and that alternatives would be pretty useful after a while.

[Anonymous Coward]

Ah well, grifters got to grift

[Jedit]

"a total of $1.9m in bonus pay for 38 employees"

Good job there weren't 40 of them. There's already a company called Alibaba.

[Howard Sway]

thousands of creditors struggle to pay basic personal expenses due to the flawed business model

The flawed business model is called cryptocurrency. The struggling creditors are called fools who thought they could earn free money by gambling every penny they had on it.

Interesting that the 30 employees kept on include "IT, accounting, legal...". What were the other 300 or so doing? Hyping up the nonsense all day long on Twitter, Discord and "coin enthusiast" sites I bet.

[Def]

Re: thousands of creditors struggle to pay basic personal expenses due to the flawed business model

There's a massive difference between making bad investments (your fault) and having those investments or investment funds held by a company that goes bankrupt (not your fault).

[Ian Johnston]

Re: thousands of creditors struggle to pay basic personal expenses due to the flawed business model

What if you gamble (the i-word is never appropriate for crypto) with a company which promises clearly unattainable returns and goes bust as a result?

[John Brown (no body)]

Re: thousands of creditors struggle to pay basic personal expenses due to the flawed business model

"bad investments (your fault)"

If they have creditors who are struggling to pay bill due to this one investment, then by your definition it's their fault. You don't invest everything you have in a single place. You spread it so if one or two or even three go titsup, you don't end up on the streets.

[Mike 137]

Statistically...

"34 out of 328 employees will be paid an extra 22.5 per cent of their annual salaries which amounts to $1.6 million. These employees provide services that are considered essential for the company"

So just under 90% of the company's employees are 'non-essential' to the business? Doesn't sound very efficient really. but might possibly contribute to the explantion for their financial straights.

[John Brown (no body)]

Re: Statistically...

I think in this case, "non-essential" are anyone not directly involved in keeping the central core of the operation ticking over. The rest will be general admin, sales, marketing etc. They are in bankruptcy mode. "Essential" means something different from "essential" in a viable and actively trading company. The "essential" staff are probably emptying their own bins and bringing sandwiches in for lunch because everyone else is gone or going.

[Anonymous Coward]

That 217 million (80%) of 270 million was fiat usd in fbo bank accounts.

Which meant it’s not part of the bankruptcy estate. And it was never voyager to begin with.

Voyager supposedly invests customers crypto, and only collaterized. Well they loaned 40% of customers funds.. to 3 aC without collateral (almost 700 million)

They want to claim they were victimized .. who in their right mind does that? For 5-10% interest,

That’s a huge risk

[fxkeh]

they had collateral for the loaned funds... it's just the collateral was funny money and actually worth (near) nothing

[Jimmy2Cows]

... considered essential for the company, such as accounting, IT infrastructure, legal ...

Good to know they're taking care of the CFO, CTO, and CLO.

[Plest]

Crypto world has 3 types of people...

1 - Rubes - Fools ready to be parted from money by falling for the lastest online scam that will extracate money from wallets with the lure of 2000% returns, only to find out their basically could have had more fun setting fire to their money out in the backyard than handing to some unknown BTC wallet in the DPRK

2 - Miners - Greedy sods with too much capitcal buying up all the video cards on the planet to they can kill the environment by using the equvalent amoutn of power to supply their warehouse each day as would be used to run a small nation

3 - Crypto bros - The sort of sociopathic zealots that would be in a cult like Scientology if the lure of bitcoin hadn't got to them already!