(Bloomberg) -- Failed cryptocurrency brokerage Voyager Digital Holdings Inc. won court approval to begin winding down its operations and start repaying customers a portion of their crypto that’s been held on its platform since last year.

Judge Michael Wiles approved Voyager’s liquidation procedures Wednesday, about a month after Binance.US terminated an agreement to purchase the crypto platform and after a deal to sell itself to FTX last year fell apart. Voyager customers will get about 36% of what they’re owed but their recovery could increase if the firm succeeds in a pending dispute with FTX, according to court documents.

Nobody is happy with the liquidation, Judge Wiles said, addressing Voyager customers who complained about his oversight of the case, the cost of the bankruptcy, the amount lawyers are being paid and the fact that users are getting only a percentage of their crypto back. 

But the wind-down is the path Voyager is taking because the firm doesn’t have enough to fully repay customers, Judge Wiles said. Options that could have resulted in a better recovery, namely selling the company to FTX or Binance, didn’t work out, he said. Voyager didn’t realize when it tried to sell itself to FTX that Sam Bankman-Fried’s firm would turn out “to be a gigantic fraud,” the judge said.

“Hindsight’s 20/20,” Judge Wiles said. “I’m sure everybody wishes that something better had happened.” 

“We are where we are, we’re trying to do the best with where we are,” the judge said.

FTX collapsed in November and Bankman-Fried has pleaded not guilty to fraud charges.

Voyager has about $630 million to repay around $1.8 billion in customer claims, according to a May 5 court filing. Customers have the option of taking their repayment in crypto or U.S. dollars.

Voyager was founded in 2018 and grew rapidly, reaching a peak of 3.5 million users and some $6 billion worth of cryptocurrency assets, according to court records. The firm had significant exposure to crypto hedge fund Three Arrows Capital Ltd. and filed Chapter 11 in July, shortly after a Bristish Virgin Islands court ordered the liquidation of Three Arrows.

The bankruptcy is Voyager Digital Holdings Inc., 22-10943, U.S. Bankruptcy Court for the Southern District of New York (Manhattan)

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