Voyager Digital, a crypto lender, files for bankruptcy

Voyager Digital announced Wednesday that it filed for bankruptcy. This comes a week after Voyager Digital suspended withdrawals, trading, and deposits from its platform. The crypto lender was seeking additional 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.

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, Voyager Chief Executive Officer, stated that “the prolonged volatility and contagion of the crypto markets in the last few months, as well as the default by Three Arrows Capital on a loan from the company’s subsidiary, Voyager Digital, LLC, requires us to take deliberate, decisive action now.”

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 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 worth approximately $324 million.

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 $110 million 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 collapse of TerraUSD, the so-called “stablecoin”, in May. This saw TerraUSD lose nearly all of its value along with its paired token.

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