Voyager digitally requests insolvency protection because the cryptocrisy intensifies

Voyager Digital has applied for US bankruptcy protection, the youngest victim of the strong decline in cryptocurrency prices that triggered a crisis on the market for digital assets.

The broker and lender in Toronto reported bankruptcy in New York to Chapter 11 late Tuesday after suffering losses of more than $ 650 million in a loan to Three Arrows Capital, the failed crypto investor.

The collapse of Voyager came less than a week after it had hired the trade and prevented customers from lifting money.

The company Three Arrows based in Singapore, which was known for its aggressive bets on rising crypto prices, had borrowed greatly from large actors in the industry to strengthen its market inserts, and left it back under water when the prices for digital tokens fell. The prices of leading cryptocurrencies have broken down by around 70 percent since its high at the end of last year.

The company went bankrupt on the past month from Alameda Research, the trading company controlled by FTX founder Sam Bankman-Fried. Voyager had used the maximum permissible $ 75 million in a single period of 30 days, which made Alameda the biggest unsecured believer, as the bankruptcy registrations showed.

The collapse of Voyager will be widely felt because the company had a large customer base under do-it-yourself crypto investors. At the end of March, its liabilities amounted to USD 5.7 billion. The petition according to Chapter 11 aims to grant Voyager protection against legal claims while it carries out a restructuring.

The company stated in the submission that there were more than 100,000 creditors and liabilities between $ 1 and $ 10 billion. The company owes Google almost $ 1 million, as the files showed, with the rest of its largest unsecured believers.

Voyager said that it had $ 110 million of cash and "own crypto assets" and $ 1.3 billion in crypto assets on its platform.

Subject to judicial approval, it is hoped that customers with "a combination" of crypto assets, revenue from the bankruptcy of Three Arrows, shares of the company when it reappears from bankruptcy and "voyager token".

The company said that it also holds $ 350 million in customer funds in US dollar deposits in a collective account at the Metropolitan Commercial Bank in New York. Customers would be repaid after "a reconciliation and fraud prevention process", it said.

Metropolitan said that the Voyager customer funds he has held are protected by US federal contribution insurance for up to 250,000 per insertion for each account holder category. The account does not consider cryptocurrency or other assets, added. Voyager said in the past that FDIC would refund "USD funds" if "the company..

Stephen Ehrlich, CEO of Voyager, said after the submission: "We firmly believe in the future of the industry, but the continuing volatility on the cryptoma markets and the failure of Three Arrows Capital require that we will actively act."

The downturn also hit the lender Celsius based in New Jersey, who frozen customer withdrawals, and the rival Blockfi, the Three Arrows also lent money and secured a rescue loan from FTX that gives the stock exchange the right to buy the company.