Stephen Ehrlich, CEO and co-founder of Voyager Digital Ltd., speaks at the Piper Sandler Global Exchange and FinTech conference in New York City, USA, June 8, 2022. REUTERS / Brendan McDermid
Register now for FREE and unlimited access to Reuters.com
Sign up
July 6 (Reuters) – US crypto provider Voyager Digital (VOYG.TO) said on Wednesday it had filed for bankruptcy, becoming another victim of a dramatic drop in prices that has shaken the sector of the cryptocurrency.
Cryptographic lenders like Voyager grew during the COVID-19 pandemic, attracting depositors with high interest rates and easy access to loans rarely offered by traditional banks. However, the recent fall in cryptocurrency markets, caused by the fall of two major tokens in May, has hurt lenders.
New Jersey-based Celsius froze withdrawals in June and has hired advisers on a possible bankruptcy filing. Voyager froze withdrawals this month, as did another lender, Vauld of Singapore. Read more
Register now for FREE and unlimited access to Reuters.com
Sign up
Last week, Voyager said it had issued a default notice to Singapore’s Three Arrows Capital (3AC) cryptocurrency hedge fund for failing to make payments on a cryptocurrency loan totaling more than $ 650 million. Read more
3AC later that week filed for bankruptcy in Chapter 15, which allows foreign debtors to protect U.S. assets, making it one of the most prominent investors affected by falling cryptocurrency prices. 3AC is being liquidated, Reuters reported last week. Read more
“The prolonged volatility and contagion in the crypto markets over the past few months and the default of Three Arrows Capital on a loan from the company’s subsidiary, Voyager Digital, LLC, are forcing us to take deliberate and decisive action now,” he said. say Voyager CEO. Officer Stephen Ehrlich said in a statement.
CHAPTER 11
In its Chapter 11 bankruptcy filing on Tuesday, New Jersey-based Voyager, which is listed in Toronto, estimated it had more than 100,000 creditors and between $ 1 billion and $ 10 billion in assets and liabilities with the same value.
Voyager had last month signed an agreement with trading firm Alameda Ventures, founded by Sam Bankman-Fried, CEO of the major FTX exchange, for a revolving line of credit. A filing with the U.S. Bankruptcy Court in the Southern District of New York showed that Alameda was Voyager’s largest sole creditor, with unsecured loans of $ 75 million.
Alameda did not immediately respond to a request for comment.
Chapter 11 bankruptcy proceedings curb all civil litigation matters and allow companies to prepare transformation plans while they remain operational.
In a message to customers on Twitter, Ehrlich said the process would protect assets and “maximize value for all stakeholders, especially customers.”
Voyager said Wednesday it had more than $ 110 million in cash and owned cryptographic assets in hand. It intends to pay employees in the usual way and continue their core benefits and certain customer programs without interruption.
Voyager has hired Moelis & Company and The Council Group as financial advisors, Kirkland & Ellis LLP as legal counsel and Berkeley Research Group LLC as restructuring consultants.
Register now for FREE and unlimited access to Reuters.com
Sign up
Report by Shivam Patel in Bangalore and Sinead Cruise and Tom Wilson in London; Additional report by Ann Maria Shibu; Editing by Rashmi Aich, Bradley Perrett, Alexandra Hudson
Our standards: the principles of trust of Thomson Reuters.