After Three Arrows, Crypto lender Voyager files for bankruptcy
1 min read 06 Jul 2022, 12:09 PM ISTCrypto lender Voyager Digital has filed for bankruptcy, a week after suspending withdrawals, trading and deposits to its platform
PremiumVoyager Digital has filed for bankruptcy, the crypto lender said in a statement on Wednesday, as reported by Reuters, a week after suspending withdrawals, trading and deposits to its platform as it sought additional time to explore strategic alternatives.
In its Chapter 11 bankruptcy filing on Tuesday, Toronto-listed Voyager estimated that it had more than 100,000 creditors and somewhere between $1 billion and $10 billion in crypto assets. The company also recorded the same range for its liabilities.
Chapter 11 bankruptcy procedures put a hold on all civil litigation matters and allow companies to prepare turnaround plans while remaining operational.
"The prolonged volatility and contagion in the crypto markets over the past 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," Voyager Chief Executive Officer Stephen Ehrlich said.
The crypto lender had suspended withdrawals, trading and deposits to its platform and said it is exploring strategic alternatives to preserve the value of its platform. The move came after the company issued a default notice to embattled hedge fund Three Arrows Capital (3AC) for the fund's failure to make required payments on a loan.
Last week, crypto hedge fund Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy, a move that protects its US assets while a liquidation is carried out in the British Virgin Islands.
A British Virgin Islands court ordered the liquidation of Three Arrows Capital earlier this week. The fund, founded by former Credit Suisse traders Zhu Su and Kyle Davies, managed an estimated $10 billion of assets as recently as March, according to blockchain analytics firm Nansen.
Many of the crypto industry's recent problems can be traced back to the spectacular collapse of so-called stablecoin TerraUSD in May, which saw the stablecoin lose almost all its value, along with its paired token.
Crypto prices started sliding late last year on expectations of a less accommodative Fed, with rising interest rates hurting the industry and its prospects. Bitcoin, the largest and most well-known cryptocurrency, is down 58% in the first six months of 2022, its worst first half of year showing ever.
