Voyager Files for Bankruptcy Citing Contagion in Crypto Markets, Three Arrows Capital’s Loan Default – Featured Bitcoin News

Voyager Digital, a crypto lender has filed Chapter 11 bankruptcy. The company explained that the “prolonged volatility and contagion in the crypto markets” and the default of crypto hedge fund Three Arrows Capital (3AC) on a loan require it “to take deliberate and decisive action now.”

Voyager’s Bankruptcy Filing

Voyager Digital Ltd. TSE: VOYG, announced Wednesday that the company has filed Chapter 11 bankruptcy. Here are the details of the announcement:

The voluntary petitions filed by the U.S. Bankruptcy Court of the Southern District of New York for Chapter 11 reorganization were made jointly by the main operating subsidiaries of the company.

In addition, the company said it “intends to seek recognition of the Chapter 11 case of Voyager in the Ontario Superior Court of Justice,” the announcement adds.

A case filed under Chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy. This bankruptcy allows for companies to plan restructuring while still being operational and puts an end to civil litigation.

Voyager, a New Jersey company with more than 100,000 creditors was estimated in its filing. Alameda Research was the crypto lender’s largest single creditor, with unsecured loans of $75 million. Voyager also stated that it had assets of between $1 billion to $10 billion, as well as liabilities equal in value.

Stephen Ehrlich is the CEO of Voyager.

The prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital (‘3AC’) on a loan from the company’s subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now.

Voyager was exposed to Three Arrows Capital, a Singapore-based crypto hedge funds. This led to huge losses. The crypto lender stated last week that it had sent a notice to 3AC regarding its failure to pay a loan amount of 15,250 Bitcoin (approximately $37 million, based on BTC’s price at the time of writing), and stablecoin USDC worth $350 million. 3AC however filed chapter 15 bankruptcy. This is a legal way for foreign debtors in the United States to secure assets.

Last week, Voyager suspended all trading, deposits, and withdrawals on its platform, citing “current market conditions.” Several other crypto firms have similarly halted withdrawals, including Celsius Network, Babel Finance, and Vauld. Nexo, a rival company, offered to take over the former.

At the time of writing, Voyager’s stock is down 97.8% year-to-date.

Voyager’s Chapter 11 bankruptcy: What is your opinion? Comment below.

Kevin Helms

Kevin is a graduate of Austrian Economics. He discovered Bitcoin in 2011, and has been an advocate ever since. He is interested in Bitcoin security and open-source software, network effects, and the intersection of cryptography and economics.