Crypto Lender Voyager Digital Bankruptcy Files


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


July 6 — U.S. cryptocurrency lender Voyager Digital (VOYG.TO) announced on Wednesday that it has filed for bankruptcy, becoming another victim of a price drop that has rocked the cryptocurrency industry.


Cryptocurrency lenders like Voyager have thrived during the COVID-19 pandemic, attracting savers with high interest rates and easy access to credit rarely offered by traditional banks. However, the recent plunge in crypto markets — sparked by the demise of two major tokens in May — has hurt lenders.


New Jersey-based Celsius froze withdrawals in June and hired advisers who could file for bankruptcy protection. Voyager froze withdrawals this month, as did Singapore-based Vault, another bank.


Last week, Voyager announced that it had issued a formal notice of default to Singapore-based crypto hedge fund Three Arrows Capital (3AC) for defaulting on crypto loans totaling more than $650 million.


3AC filed for Chapter 15 bankruptcy later this week, allowing foreign debtors to protect U.S. assets, becoming one of the high-profile investors hit by falling cryptocurrency prices. 3AC is now in liquidation, Reuters reported last week.


“Continued volatility and contagion in the crypto market over the past few months, as well as Three Arrows Capital’s default on loans to the company’s subsidiary Voyager Digital, LLC, requires us to take conscious and decisive action now,” Voyager CEO Stephen Ehrlich said in a statement. .


In its Chapter 11 bankruptcy filing on Tuesday, New Jersey-based but Toronto-listed Voyager estimated it had more than 100,000 creditors with between $1 billion and $10 billion in assets and the same value in liabilities.


Voyager last month signed a revolving line of credit agreement with Alameda Ventures, a trading firm founded by major exchange FTX CEO Sam Bankman-Fried. Alameda is Voyager's largest single creditor with a $75 million unsecured loan, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.


Alameda did not immediately respond to a request for comment.


Chapter 11 bankruptcy proceedings bring all civil matters to a halt, allowing the company to develop a turnaround plan while continuing to operate.


In a message to clients on Twitter, Ehrlich said the process would protect assets and \"maximize value for everyone involved, especially customers.\"


Voyager said Wednesday that it has more than $110 million in cash and crypto assets on hand. It intends to pay employees in the usual way and to continue its core services and certain customer programs without interruption.


Voyager has retained Moelis & Company and The Consello Group as financial advisors, Kirkland & Ellis LLP as legal advisor and Berkeley Research Group LLC as restructuring advisor.


💌 Resources and references: reuters.com 🔊 Crypto Lender Voyager Digital Bankruptcy Files..


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