Published , by TJ Denzer
Published , by TJ Denzer
A major force in cryptocurrency brokerage is bowing out of the game. Voyager Digital is a group with around $1 billion to $10 billion USD in assets, as well as $1 billion to $10 billion in liabilities and around 100,000 creditors. With ongoing issues in the crypto space and a recent major default on a loan in the hundreds of millions, Voyager Digital has filed for Chapter 11 bankruptcy.
Voyager Digital officially submitted paperwork for Chapter 11 bankruptcy to the Southern District of New York on July 5, 2022, as reported by Forbes. Voyager Digital was recently heavily affected by the default of a loan to Singapore-based hedge fund Three Arrows Capital (3AC). The defaulted loan totaled to $675 million USD in mixed sums of bitcoin and stablecoin USDC. In an accompanying statement, Voyager Digital CEO Stephen Ehrlich pointed to this event as a major influencing factor among others in Voyager’s decision to file for Chapter 11 bankruptcy.
“While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital require us to take deliberate and decisive action now,” Ehrlich said in his statement. “The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.”
Leading up to the filing, Voyager Digital claimed it had approximately $137 million in cash and assets on hand. It also revealed that it had used around $75 million of a $200 million loan in cash and bitcoin to oversee customer orders and withdrawals. Alameda Ventures, who supplied the loan, shared with Forbes that it does not expect to recoup the loan.
With Voyager Digital filing for Chapter 11 bankruptcy, it takes another multimillion-dollar crypto player out of the game. As the market continues to remain volatile, er remains to be seen if this is the last story we see of this nature, even in the near future. Stay tuned as we continue to follow ongoing stories in the cryptocurrency market here at Shacknews.