Voyager Digital files for chapter 11 bankruptcy in the US Bankruptcy Court of the Southern District of New York, and right after we saw the stocks of the company crashing so let’s have a closer look at today’s latest cryptocurrency news.
Voyager Digital became the second high-profile crypto company to file for bankruptcy in the past few days and joined the likes of Three Arrows Capital. The New York-based company and two of its affiliates took the step in the Southern District of New York late on Tuesday and according to the documents, Voyager had more than 100,000 creditors and between $1 and $10 billion in assets in the range of its liabilities.
Voyagers, today we began a voluntary financial restructuring process to protect assets on the platform, maximize value for all stakeholders, especially customers, and emerge as a stronger company. Voyager will continue operating throughout.https://t.co/TxlO4eua8E
— Stephen Ehrlich (@Ehrls15) July 6, 2022
A month ago, the company revealed that it had $661 million exposure to 3AC which is a crypto hedge fund that failed to meet the margin calls from lenders and filed for bankruptcy as well. The Voyager Digital CEO Stephen Ehrlich said:
“We strongly believe in the future of the industry but the prolonged volatility in the crypto markets, and the default of Three Arrows Capital, require us to take this decisive action.”
Voyager paused trading, deposits, and withdrawals last Friday and now it is coming up with a new reorganization plan which will resume the access and will return the value to the customers:
“Customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized Company, and Voyager tokens.”
Voyager Digital files for bankruptcy but the CEO added that the company is pursuing the remedies for recovery from 3AC and can confirm that customers with USD deposits in their accounts will get access to these funds after a reconciliation and fraud prevention process is completed.
As recently reported, The trading platform Voyager Digital announced that it halted all withdrawals deposited and trading due to the market conditions. Earlier this week, the company issued a default notice to three Arrows Capital, a hedge fund whose apparent demise sent shockwaves on the entire crypto industry and impacted other companies that had exposure to it. Voyager Digital said that it loaned Three Arrows Capital up to $296 million in BTC and $350 million in USDC.
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