Key Takeaways
- Voyager filed for Chapter 11 bankruptcy on Tuesday.
- The platform has over 100,000 creditors and about $1 billion to $10 billion in assets.
- The now insolvent 3AC had defaulted on a $665 million loan to Voyager.
Crypto lending giant Voyager has filed for Chapter 11 bankruptcy, just four days after suspending all operations. The Toronto-based firm filed for Chapter 11 bankruptcy on Tuesday in New York. Voyager is expected to have more than 100,000 creditors and about $1 billion to $10 billion in assets.
Voyager’s different verticals, which include Voyager Digital Holdings, Inc., Voyager Digital, LLC, and Voyager Digital Ltd., have all filed for bankruptcy. In Chapter 11 bankruptcy, the debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time.
With this latest development, Voyager joins Singapore-based Three Arrows Capital in filing for bankruptcy. 3AC, beaten by the market conditions, filed for Chapter 15 bankruptcy on July 2. The bankruptcy filing is an indication that Voyager’s last-ditch efforts to save itself from insolvency were futile. Voyager Digital has been trying to maintain solvency throughout June’s industry-wide crypto liquidity crisis.
On June 22, the platform secured a loan worth $500 million in cash and crypto from Sam Bankman-Fried’s Alameda Research. That loan was intended to replace funding from Three Arrows Capital, which defaulted on a $665 million loan. Despite multiple warnings 3AC did not repay the loan making Voyager unable to meet its customers’ liquidity needs.
Voyager Digital, Ltd.’s equity holders, include Alameda Research Ventures LLC and Alameda Ventures Ltd., two companies associated with Sam Bankman-Fried, the founder of crypto exchange FTX. This is notable since FTX was responsible for bailing out the troubled digital-asset lender BlockFi. The bankruptcy filing points out that the Voyager owes Google around $1 million.
The current market volatility has hit all crypto hedge funds and lending platforms alike. Apart from Voyager, Celsius and Vauld, both big names in the crypto market, also had to succumb to market vulnerabilities and suspend all operations.
