Cryptocurrency lender Voyager Digital files for bankruptcy Voyager Digital filed for bankruptcy on Wednesday. This comes a week after Voyager Digital suspended withdrawals, trading, and deposits to its platform.
The crypto lender did this because it wanted to take time to evaluate strategic alternatives.
Voyager, a New Jersey-based bankruptcy attorney, filed a Chapter 11 bankruptcy filing Tuesday. It estimated it had more than 100,000 creditors, approximately $1 billion to $10 billion in assets, and the same amount of liabilities.
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Chapter 11 bankruptcy proceedings put an end to all civil litigation and allow companies to prepare turnaround plans while they are still operational.
Stephen Ehrlich, chief executive officer of Voyager Digital, LLC, stated that the prolonged volatility and contagion in crypto markets
as well as the default by Three Arrows Capital on a loan taken from Voyager Digital, LLC, requires us to take deliberate, decisive action immediately.
Ehrlich also sent a separate message on Twitter to customers, stating that the process would protect assets, and “maximize value” for all parties, including customers.
According to the U.S. Bankruptcy Court Southern District of New York, Alameda Research was Voyager’s largest single creditor with unsecured loans of $75 million.
Voyager reported Alameda’s October investment in October. Voyager described the deal as a “strategic alliance” with “a clear leader” in the crypto industry.
The partnership provided endless mutually beneficial opportunities for both of our businesses to grow,” Caroline Ellison (Co-CEO, Alameda) said.
Voyager announced last week that it had sent a notice to Three Arrows Capital, a crypto hedge fund based in Singapore, for failing to pay the required.
payments on a loan amount of 15,250 bitcoin (approximately $224 million) as well as a USDC loan worth $350 million. This stablecoin is called USDC.
3AC filed chapter 15 bankruptcy later that week. This allows foreign debtors the ability to protect U.S. assets.
Three Arrows is one the most prominent investors to have been hit hard by the crypto market sell-off and is now being liquidated, Reuters reported last Wednesday, citing a source familiar with the matter.
Voyager stated Wednesday that it has more than $110million in cash and crypto-assets. Voyager plans to continue paying employees as usual and maintain certain customer programs and primary benefits.
Many of the recent problems in the crypto industry can be traced back to the May collapse of TerraUSD (so-called stablecoin), which lost nearly all of its value along with its paired token.
Voyager has appointed Moelis and Company and The Consello Group to be its financial advisors. Kirkland and Ellis LLP is the legal adviser and Berkeley Research Group LLC is the restructuring adviser.
