Crypto lender Voyager Digital is filing for bankruptcy

Stephen Ehrlich, CEO and co-founder of Voyager Digital Ltd., speaks at the Piper Sandler Global Exchange and FinTech Conference in New York City, USA, June 8, 2022. REUTERS / Brendan McDermid

July 6 (Reuters) – Voyager Digital (VOYG.TO) said on Wednesday that it had filed for bankruptcy, a week after the cryptocurrency lender suspended withdrawals, trading and deposits to its platform as it sought more time to explore strategic options.

In its Chapter 11 bankruptcy filing on Tuesday, New Jersey-based Voyager estimated that they had more than 100,000 creditors and somewhere between $ 1 billion and $ 10 billion in assets, and liabilities worth the same value.

Chapter 11 bankruptcy proceedings address all civil litigation and allow companies to prepare treatment plans while they remain in operation.

“The long-standing volatility and contagion in the crypto markets in recent months, and the failure of Three Arrows Capital on a loan from its subsidiary, Voyager Digital, LLC, require that we take conscious and decisive action now,” said Voyager’s CEO. Officer Stephen Ehrlich said in a statement.

Last week, Voyager said it had issued a default notice to Singapore-based crypto hedge fund Three Arrows Capital (3AC) for failing to make necessary payments on a loan of 15,250 bitcoin (approximately $ 324 million) and USDC worth $ 350 million dollars, and stablecoin. read more

Later that week, 3AC filed Chapter 15 bankruptcy, allowing foreign debtors to shield U.S. assets.

Three Arrows is one of the highest-profile investors affected by the strong sales in crypto markets and is being liquidated, Reuters reported last week, quoting a person familiar with the matter. read more

Voyager said Wednesday that it has over $ 110 million in cash and owned cryptocurrencies at hand. It intends to pay employees in the usual way and continue their primary benefits and certain customer programs without interruption.

Many of the crypto industry’s recent problems can be traced back to the spectacular collapse of the so-called “stablecoin” TerraUSD in May, which saw the stablecoin lose almost all of its value, along with its interconnected token. read more

Reporting by Shivam Patel in Bengaluru; Additional reporting by Ann Maria Shibu; Edited by Sherry Jacob-Phillips and Rashmi Aich

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