Crypto broker 'Voyager' files for bankruptcy amid Three Arrows default
Categories: Crypto News US
Crypto broker 'Voyager' files for bankruptcy amid Three Arrows default
In a move that will come as no surprise to anyone, even those remotely investing in the digital asset space, crypto exchange Voyager Digital has filed for Chapter 11 bankruptcy this week because of the failed hedge fund Three Arrows Capital (3AC) and a founder exposed to the crypto market.
With more than 100,000 creditors said to be owed US$1 billion to US$10 billion in assets, Voyager says its voluntary bankruptcy move is part of a "restructuring plan" once implemented. , will enable customers to access their accounts again. In doing so, Voyager says it will "return value to customers".
Detailing the plan, Voyager CEO Stefan Ehrlich said that customers who hold crypto in their accounts will receive a combination of crypto, proceeds from the 3AC recovery, common shares in the newly reorganized company, and Voyager tokens. Voyager's announcement comes after Alameda Research, the trading firm founded by FTX CEO Sam Bankman-Fried (aka SBF), led a US$60 million fundraising round for the crypto lender in May.
Less than a fortnight later, the SBF warned that some "third-tier" crypto exchanges had secretly gone bankrupt. Surely he must have seen the writing on the wall for Voyager? Earlier this month, Voyager halted all trading and withdrawals on its platform, citing 3AC's $650 million in defaulted debt.
Less than a fortnight later, the SBF warned that some "third-tier" crypto exchanges had secretly gone bankrupt. Surely he must have seen the writing on the wall for Voyager? Earlier this month, Voyager halted all trading and withdrawals on its platform, citing 3AC's $650 million default date.
In response, Alameda provided Voyager a massive line of credit made up of approximately US$200 million in cash and 15,000 bitcoins. Good money after bad? Voyager says it wants to pay its employees the normal way and continue with its "primary benefits and certain customer programs without disruption." However, trading, deposits, withdrawals and loyalty rewards will remain suspended.