Crypto lender Voyager files for bankruptcy, owes to over 100K creditors
As per the petition filed, Voyager’s estimated assets and liabilities lie between $1 billion and $10 billion, and has more than 100,000 creditors.
Crypto lending platform , on Wednesday, announced it was filing for Chapter 11 bankruptcy protection in the Southern District Court of New York. There are three business entities under its umbrella—Voyager Digital Holdings, Voyager Digital LLC, and Voyager Digital Ltd, and as per the petition filed, the firm has more than 100,000 creditors.
Stephen Ehrlich, CEO of Voyager, stated in the company's blog, "This comprehensive reorganisation is the best way to protect assets on the platform and maximise value for all stakeholders, including customers."
He further stated, “While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital require us to take deliberate and decisive action now."
Stephen further took to Twitter to explain that under its proposed plan, customers with cryptocurrency in their accounts will receive in exchange a combination of crypto, proceeds from the 3AC recovery, common shares in the newly reorganised company, and Voyager tokens.
Randall G Reese, President and Founder of Chapter 11 Dockets, which produces solutions for bankruptcy information and research needs, shared the document of a voluntary petition filed by the firm.
The firm also confirmed that customers with USD deposits in their accounts will receive access to those funds after a reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank.
The company further stated that it plans to pay its employees in a regular manner and continue their primary benefits and certain customer programmes without disruption. But, trading, deposits, withdrawals and loyalty rewards will remain suspended.
In June, Voyager halted withdrawals from its platform—limiting customer withdrawals up to $10,000 and up to 20 transactions in a day.
Since the collapse of stablecoin TerraUSD, the industry is being battered by snowballing issues. Last month, reports broke out that crypto hedge fund Three Arrows Capital was facing possible insolvency. Several crypto lending platforms including Celsius Network and Vauld have halted withdrawals.
Edited by Kanishk Singh
