Updated · Nov 16, 2022
Crypto Brokerage Voyager Digital Files for Bankruptcy
Updated · Jul 06, 2022
The company disclosed it had filed for bankruptcy on Tuesday. It has more than 100,000 creditors.
Crypto brokerage firm Voyager Digital has announced that it has filed for Chapter 11 bankruptcy. It cited the upheaval in the cryptocurrency market and the collapse of Three Arrows Capital, a firm it lent funds to, as reasons for the decision.
The US-based company and its affiliates, Voyager Digital LLC and Voyager Digital Holdings made the filing in the Southern District of New York on Tuesday.
“The prolonged volatility and contagion in the crypto markets over the last few months, and the default of Three Arrows Capital on a loan from the company’s subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now,” CEO Stephen Ehrlich said in a statement.
He added that the Chapter 11 process would grant the firm an “efficient and equitable mechanism to maximize recovery”.
Three Arrows Capital borrowed $650 million from Voyager.
The company listed assets of between $1 billion and $10 billion. Its liabilities also fall within the same range. Furthermore, it estimates it has about 100,000 creditors.
Several other crypto firms have found themselves unable to navigate the treachery market conditions. Last month, lending giant Celsius paused all withdrawals, transfers, and swaps.
A Flopped Lifeline
Voyager Digital’s decision to file for bankruptcy comes just weeks after it received a $485 million lifeline from Alameda Research. Sam Bankman-Fried, the billionaire CEO of cryptocurrency exchange FTX also owns the private equity firm.
Voyager already owed $75 million to Alameda Research.
Last week, it paused all withdrawals, deposits, and trading on its platform, citing “current market conditions”.
Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.
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