On Tuesday, July 5, cryptocurrency broker Voyager Digital filed for bankruptcy in a New York court.

The company’s estimated liabilities range from $1 billion to $10 billion with nearly 100,000 customers.

A similar petition under Section 11 of the US Bankruptcy Code was filed by subsidiaries – Voyager Digital Holdings Inc and Voyager Digital LLC. The company expects its financial restructuring process to “maximize value for all stakeholders.”

Voyager Company and Customer Update: https://t.co/1VLshQrJrr

— Voyager (@investvoyager) 6 July 2022

“The Voyager platform was created to empower investors […]. I firmly believe in this future in default, as well as the ongoing volatility and contagion in the crypto markets over the past few months. [хедж-фонда] Three Arrows Capital (3AC), borrowed from Voyager Digital LLC, now requires that we take deliberate and decisive action,” said Stephen Ehrlich, CEO of the broker.

According to the press release, Voyager has approximately $1.3 billion on the platform, more than $350 million in accounts with the Metropolitan Commercial Bank, and over $650 million in claims against 3AC. crypto assets.”

Erlich stressed that the broker will continue to work. According to him, Voyager’s goal is to become a stronger company after restructuring.

Voyagers began a voluntary financial restructuring process today to preserve assets on the platform, maximize value for all stakeholders, primarily customers, and emerge as a stronger company. Voyager will continue to work from start to finish.https://t.co/TxlO4eua8E

— Stephen Ehrlich (@Ehrls15) 6 July 2022

“Customers with crypto in their account will receive in return cryptocurrency, 3AC recovery proceeds, common stock in the newly reorganized company, and Voyager tokens,” Erlich wrote.

He said customers with dollar deposits will be able to access the funds after the verification process at the Metropolitan Commercial Bank is complete. The senior executive added that the company is “actively using all available funds” to offset losses from Three Arrows Capital.

As part of this announcement, it is important to note that we confirmed that customers with USD deposits in their account(s) will have access to these funds after a settlement and fraud prevention process with Metropolitan Commercial Bank has been completed.

— Stephen Ehrlich (@Ehrls15) 6 July 2022

On July 3, economist Francis Coppola drew attention to Voyager’s loan portfolio. According to him, it consists of approximately 58% of 3AC loans. After evaluating the financial statements, he came to the conclusion that the broker was in an extremely difficult situation.

The company has previously lent 15,250 BTC (about $304 million at the time of writing) and 350 million USDC in hedge funds. However, against the background of the collapse of the cryptocurrency market and the collapse of Terra, information appeared about the bankruptcy of 3AC.

On June 23, Voyager reduced its daily withdrawal limit from $25,000 to $10,000 due to 3AC issues. To protect clients’ assets, the company agreed with Sam Bankman-Fried’s Alameda Research on a 200 million USDC loan and a 15,000 BTC revolving line of credit.

On June 24, Voyager Digital asked Three Arrows Capital to settle some of its $25 million USDC debt, and then requested that all the loan in BTC and stablecoins be repaid by June 27. Since this did not happen, the crypto broker sent a notice of default to 3AC.

Recall that on July 2, Three Arrows Capital filed for bankruptcy.

Prior to that, the British Virgin Islands court decided to liquidate the hedge fund and Singapore’s financial regulator chastised 3AC for providing false information and exceeding the threshold of allowable assets under management.

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