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Many crypto-related firms have recently had their very existence rattled to their cores as a result of the wider market crash, and one of such is Voyager Digital.
Less than a week after pausing withdrawals and trading on its platform, crypto broker Voyager Digital is filing for Chapter 11 bankruptcy with the Southern District Court of New York. According to the court filing, the broker has liabilities worth between $1 billion to $10 billion in assets, to over 100,000 creditors.
Voyager Digital Sets Out to Reorganize
In line with the bankruptcy filing, the troubled crypto broker Voyager Digital has now issued a statement on Wednesday, clarifying what made the move necessary. According to Voyager, the filing is part of its “Reorganization” plans to ensure that clients regain access to their various accounts and funds.
To further butress on that, the CEO of Voyager, Stephen Ehrlich also confirms the firm’s intentions in a tweet. Assuring client’s of the safety of their funds, Ehrlich wrote;
“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.”
Ehrlich insists this is the best course of action to protect assets on the platform and ultimately keep Voyager operating.
Desperate Times for Crypto Firms Persists
Many crypto-related firms have recently had their very existence rattled to their cores. And this is because of nothing other than a wider market crash that saw no less than $2 trillion vanish off from the crypto space. One of such companies is Voyager Digital.
The first signs that Voyager could be facing bankruptcy came when it signed a $500 million loan agreement. This was with FTX’s trading firm Alameda Research. However, the lending platform claimed that the loan was to cover losses from being exposed to venture capital firm 3AC.
A day later, Voyager Digital restricted the daily withdrawal limit to $10,000, before finally halting withdrawals altogether by July 1.
As previously reported by Coinspeaker, Voyager also issued a default notice to 3AC, after the latter failed to pay up its loan. The broker had lent 3AC a total of 15,250 Bitcoin (BTC) and $350 million USD Coin (USDC).
With Three Arrows Capital now officially bankrupt, however, recovering the funds lent out may amount to finding a needle in a haystack for Voyager.