A week after suspending trading on the platform, Voyager has filed for bankruptcy as it explores financial strategies to reorganise the business.
US-based crypto lender Voyager Digital has filed for bankruptcy amid “prolonged volatility and contagion” in the cryptocurrency market.
The move comes just a week after Voyager suspended all withdrawals, deposits and trading on the platform to give itself time to explore financial strategies.
Voyager has filed for Chapter 11, which is a form of bankruptcy that involves the reorganisation of a company’s business affairs, debts and assets, while allowing it to simultaneously stay in business.
“This comprehensive reorganisation is the best way to protect assets on the platform and maximise value for all stakeholders, including customers,” said Voyager chief executive Stephen Ehrlich.
Ehrlich added that while the Voyager platform was built to empower investors by providing easy and quick access to crypto asset trading, “prolonged volatility and contagion” in the crypto market has required the company to take action.
Also contributing to the decision is a loan default by crypto hedge fund Three Arrows Capital, which entered liquidation last week.
“The Chapter 11 process provides an efficient and equitable mechanism to maximise recovery,” Ehrlich added.
If and when implemented, the proposed reorganisation plan aims to resume account access. Customers with crypto in their accounts will receive a combination of the crypto, proceeds from the recovery, common shares in the newly reorganised company, and Voyager tokens.
“Customers with USD deposits in their accounts will receive access to those funds after a reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank,” a Voyager statement today (6 July) reads. “The company continues to evaluate all strategic alternatives to maximise value for stakeholders.”
Founded in 2018, Voyager says it has approximately $1.3bn in crypto assets on its platform. It also has more than $350m in cash held in an account for customers at Metropolitan Commercial Bank, as well as claims against Three Arrows Capital of more than $650m.
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