After defaulting on $673 million, Voyager Digital files for bankruptcy – Money Times

Last week, Voyager Digital notified another company for a default of more than $670 million. (Image: Freepik/frimufilms)

the creditor of cryptocurrencies Voyager Digital filed for bankruptcy in New York this Tuesday (5), at a time when the collapse of the crypto market claims another victim.

According to a court order from the creditor and a statement, voyager has approximately $1.3 billion in crypto assets on its platform, more than $350 million in cash held in a Benefit Customers Account (FBO) at Metropolitan Commercial Bank and claims against crypto hedge fund Three Arrows Capital (3AC) for a debt over US$ 670 million.

The estimated number of creditors exceeds 100 thousand.

O CEO gives Voyager DigitalStephen Ehrlich shared the company’s statement on Twitter this Wednesday (6), before saying that “we believe strongly in the future of the industry, but the prolonged volatility in the cryptocurrency markets and the default by Three Arrows Capital made us take this action. decisive”.

the misfortunes of voyager are symptoms of a broader downturn in the crypto market, which began in May with the implosion of the blockchain Terra – which removed $40 billion in market value.

Crypto market woes followed worse macroeconomic conditions, and during June, several cryptocurrency companies faced liquidity problems, including lending platforms Celsius Network and BlockFi.

Voyager Digital aims to regain customer access to accounts

The statement presented the plan for restructuring the Voyager Digitalwhich intends to regain access to accounts and return the amounts to customers.

Customers will be compensated with a combination of the cryptos in their accounts, 3AC recovery proceeds, shares in the reorganized company and Voyager’s native crypto tokens. These plans are subject to change and need court approval first.

The company said users with dollar deposits will receive access to the funds after a fraud prevention and reconciliation process is completed. Meanwhile, the company “continues to evaluate all strategic alternatives to maximize shareholder value”.

Voyager Digital has over $110 million in cash and crypto assets of its own on hand, which will be used to provide liquidity for day-to-day operations during the bankruptcy filing process – this amount is not included in the $350 million in cash in the FBO account.

Last Friday (1), Voyager Digital suspended withdrawals, deposits and trading, citing current market conditions.

On Monday of last week, the company issued a notice of default to crypto hedge fund Three Arrows Capital regarding the $673 million loan that was not repaid.

Three Arrows Capital has filed for bankruptcy in the United States last Friday.
Three corporate entities – Voyager Digital Holdings, Voyager Digital LLC and Voyager Digital Ltd. – are seeking bankruptcy protection. The three virtually identical petitions were filed through the bankruptcy court for the Southern District of New York.

Voyager Digital is being represented by Kirkland and Ellis LLP, according to the official documents, with Berkeley Research Group LLC as advisor for the lender’s restructuring.

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O Money Times publishes informative articles of a journalistic nature. This publication does not constitute an investment recommendation.

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