Crypto lender Voyager Digital files for bankruptcy

Stephen Ehrlich, CEO and Co-Founder of Voyager Digital Ltd., spoke during the Piper Sandler Global Exchange and FinTech Conference in New York City, USA, June 8, 2022. REUTERS/Brendan McDermid

July 6 (Reuters) – Voyager Digital (VOYG.TO) said Wednesday it had filed for bankruptcy, a week after crypto lenders postponed withdrawals, trades and deposits to the platform in search of additional time to explore strategic alternatives.

In its Chapter 11 bankruptcy filing Monday, New Jersey -based Voyager estimated it had more than 100,000 creditors and somewhere between $ 1 billion and $ 10 billion in assets, and liabilities worth the same value.

Chapter 11 of the bankruptcy procedure holds all civil court matters and allows the company to prepare a turnaround plan while it is still operational.

“The ongoing Vatility and contagion in the crypto market over the past few months, and the default of Three Arrows Capital with a loan from its subsidiary, Voyager Digital, LLC, requires us to take deliberate and decisive action now,” Voyager’s chief executive said. Officer Stephen Ehrlich said in a statement.

In a separate message to customers the company Twitter handles, Ehrlich said the process will protect assets and “optimize value for all stakeholders, especially customers”.

A filing with the U.S. Bankruptcy Court of the Southern District of New York shows that Alameda Research is the single largest creditor in Voyager, with an unsecured loan of $ 75 million.

Voyager announced Alameda’s investment in October, describing the deal as a “strategic alliance” with a “clear pioneer” in the crypto industry.

At the same time, Alameda Co-CEO Caroline Ellison said the partnership provides “endless mutually beneficial opportunities to grow our business.”

Last week, Voyager said it had issued a standard notification to Singapore -based cryptocurrency hedge fund Three Arrows Capital (3AC) for failing to repay loans of 15,250 bitcoin (approximately $ 324 million) and USDC $ 350 million. stablecoin. read more

Later that week, 3AC filed for bankruptcy Chapter 15, which allows foreign debt to protect U.S. assets.

Three Arrows was one of the top investors affected by the sale in the crypto market and was disbanded, Reuters reported last week, citing people familiar with the matter. read more

Voyager said Wednesday that it has more than $ 110 million in cash and has crypto assets. The goal is to pay employees in the usual way and continue their primary benefits and specific customer programs without interruption.

Many of the new issues in the crypto industry can be traced back to a spectacular collapse in May called the TerraUSD stablecoin, which lost almost all of its value, along with its paired tokens. read more

Voyager has hired Moelis & Company and The Consello Group as financial advisor, Kirkland & Ellis LLP as legal advisor and Berkeley Research Group LLC as restructuring advisor.

Reports by Shivam Patel in Bengaluru and Sinead Cruise in London; Additional report by Ann Maria Shibu; Edited by Rashmi Aich and Bradley Perrett

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