Voyager Files for Bankruptcy Citing Contagion in Crypto Markets, Three Arrows Capital"s Loan Default
Crypto lender Voyager Digital has filed for 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 it has filed for Chapter 11 bankruptcy. The announcement details: The company and its main operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court of the Southern District of New York.
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 type of bankruptcy puts a hold on all civil litigation matters and allows companies to prepare restructuring plans while remaining operational.
In its filing, New Jersey-based Voyager estimated that it has more than 100,000 creditors. Alameda Research was the crypto lender’s largest single creditor, with unsecured loans of $75 million. In addition, Voyager said it has between $1 billion and $10 billion in assets, and liabilities worth the same value.
Stephen Ehrlich, CEO of Voyager, explained: 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 suffered huge losses from its exposure to Singapore-based crypto hedge fund Three Arrows Capital. Last week, the crypto lender said it had issued a notice of default to 3AC for failing to make required payments on a loan of 15,250 bitcoin (approximately $307 million based on the price of BTC at the time of writing) and $350 million worth of stablecoin USDC. However, on July 1, 3AC filed for chapter 15 bankruptcy, which allows foreign debtors to shield U.S. 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. The latter receiveda takeover bid from rival firm Nexo on Tuesday.
At the time of writing, Voyager’s stock is down 97.8% year-to-date. Tags in this story 3AC, Crypto lender, Three Arrows Capital, Three Arrows Capital bankrupt, Three Arrows Capital bankruptcy, voyager, Voyager bankrupt, Voyager bankruptcy, Voyager files bankruptcy
What do you think about Voyager filing for Chapter 11 bankruptcy? Let us know in the comments section below. Kevin Helms
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. British Army"s Social Media Accounts Hacked to Promote Bitcoin Giveaways, Crypto Scams FEATURED | 2 days ago Meta Ending Crypto Project Novi After Mark Zuckerberg Unveiled Metaverse Digital Wallet FEATURED | 4 days ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleBitcoin, Ethereum Technical Analysis: BTC Hovers Slightly Above $20,000, as Crypto Volatility Continues Next articleThe Premiere of ClearIndex, With NFT Series Indices Released Today Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItOman to Incorporate Real Estate Tokenization in Virtual Assets Regulatory Framework
Real estate tokenization is set to be incorporated into Oman Capital Markets Authority (OCMA)"s virtual asset regulatory framework. According to an advisor with the authority, the tokenizing of real estate will open investment opportunities for local and foreign investors. Real ... read more.Tony Hawk"s Latest NFTs to Come With Signed Physical Skateboards Following a Brief Fee Spike, Gas Prices to Move Ethereum Drop 76% in 12 Days Argentinian Securities Regulator Launches Innovation Hub to Discuss Regulated Crypto Investments Economist Predicts the Fed"s Response to Inflation Will Push Crypto Higher