Crypto Lender Voyager Seeks Chapter 11 Protection

bankruptcy, chapter 11, voyager, crypto lending

Crypto lender Voyager filed for Chapter 11 bankruptcy protection a week after halting withdrawals and two weeks after getting a $485 million bailout from FTX founder Sam Bankman-Fried’s firm Alameda Research.

Alameda Research now stands as Voyager’s biggest creditor with an outstanding loan of $75 million, according to multiple reports on Wednesday (July 6).

Voyager and its two affiliates, Voyager Digital LLC and Voyager Digital Holdings, filed Chapter 11 voluntarily in the U.S. Bankruptcy Court of the Southern District of New York to restructure and “create a path” to resume operations and “return value to customers,” according to a press release

See also: Bankman-Fried Bails Out Crypto Broker Voyager and Blames Fed for Downturn 

The crypto lender said it has approximately $1.3 billion of crypto assets on the platform and more than $350 million of cash held in a For Benefit Of (FBO) account for customers. Voyager also has more than $650 million in claims against Singapore-based cryptocurrency hedge fund Three Arrows Capital, which is in liquidation. 

“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,” said Stephen Ehrlich, co-founder and CEO of Voyager Digital.

Read more: Crypto Lender Vauld Suspends Withdrawals as Customers Yanked $200M

“Voyager’s platform was built to empower investors by providing access to crypto asset trading with simplicity, speed, liquidity, and transparency,” he said.

Ehrlich said he “strongly believes in this future” but between the “prolonged volatility and contagion in the crypto markets” and Three Arrows Capital’s default on a loan, the company had no choice but to “take deliberate and decisive action now. The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.” 

Related: Another Firm Cuts Withdrawals, Highlighting Crypto Lending’s Dangers

Voyager’s tale of woe is just another in a recent flood of crypto lenders halting withdrawals or suspending operations during a market collapse that’s wiped roughly $2 trillion from the value of cryptocurrencies.

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