Embarrassed cryptocurrency Voyager Digital He filed for Chapter 11 bankruptcy protection and became the latest victim of turmoil in the digital asset market.
According to the company’s submission, Voyager began bankruptcy proceedings on Tuesday at the US Bankruptcy Court in the Southern District of New York. The filing lists $ 1 billion to $ 10 billion in assets and the same range of liabilities.
and statementThe company said it has about $ 1.3 billion in cryptocurrencies on its platform and holds over $ 350 million in cash on behalf of its customers at Metropolitan Commercial Bank in New York.
Voyager suffered significant losses from its exposure to the crypto hedge fund Three Arrows Capital. Three Arrows Capital went bankrupt last week after defaulting on loans from many companies in the industry, including $ 650 million from Voyager.
“We strongly believe in the future of the industry, but the long-term volatility of the crypto market and the defaults of Three Arrows Capital require us to take this decisive action,” said Voyager CEO Stephen. Erich said in an early tweet on Wednesday.
The shares of a Toronto-listed company have lost almost 98% of its value since the beginning of 2022.
Voyager says he continues to seek to recover funds from Three Arrows Capital (3AC), including through court-supervised procedures in the British Virgin Islands and New York.
Last week, Voyager Paused all withdrawals, Deposits and transactions on the platform by “current market conditions”. At the time, Erich said Voyager was looking for additional time to explore “strategic alternatives with various stakeholders.”
The crypto market is facing a serious liquidity crisis as the platform struggles to cope with the flood of customer withdrawals amid a sharp fall in digital currency prices.
The decline in cryptocurrencies began with a significant decline in risky assets. Federal Reserve Embarked on monetary tightening and regained post-collapse pace TerraIt was a so-called stablecoin venture, worth about $ 60 billion at its height.
Voyager said the bankruptcy proceedings will allow the restructuring process to be carried out so that customers can be reimbursed.
If all goes according to plan, users will receive a combination of cryptocurrencies in their account, revenue from the collection of funds from Three Arrows Capital, shares of the newly reorganized company, and Voyager tokens.
According to Voyager, customers with US dollar deposits will be able to regain access to their funds once the coordination and fraud prevention process with Metropolitan Commercial Bank has been completed.
Billionaire’s Sam Bankman-Fried’s quantitative trading store, Alameda Research, has expanded Voyager. $ 500 million worth of credit lines Last month in cash and cryptocurrencies in a futile attempt to get over the company.
Alameda was listed as Voyager’s largest creditor in a bankruptcy filing Tuesday, with $ 75 million in unsecured claims.
Bankman-Fried, who also founded the crypto exchange FTX, became the last lender of the troubled industry.He recently went to FTX Option to buy crypto lending company BlockFi Up to $ 240 Million — A Dramatic Drawdown from the Last Personally Valued $ 3 Billion.
Some people liken Bankman-Fried’s efforts to the role played by a well-known banker. John Pierpont, or JP, Morgan To save Wall Street lenders from the collapse after a series of run runs known as the Panic of 1907 prior to the establishment of the Federal Reserve.