In another major setback to the crypto industry, the US-based crypto broker and lender Voyager Digital on Tuesday filed for the bankruptcy process. The firm, through the bankruptcy procedure, intends to maximize value for all its stakeholders, it said in a statement.
It aims to pay its employees in the usual manner and continue their primary benefits and certain customer programs without disruption. Trading, deposits, withdrawals and loyalty rewards on the Voyager platform remain temporarily suspended.
Founded in 2018, it has approximately $1.3 billion of crypto assets on its platform, plus claims against Singapore-based Three Arrows Capital (“3AC”) of more than $650 million. The Three Arrows Capital has defaulted on various loans and is in deep trouble.
“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,” said Stephen Ehrlich, Chief Executive Officer of Voyager in the statement. “Voyager’s platform was built to empower investors by providing access to crypto asset trading with simplicity, speed, liquidity, and transparency. While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months…,” Ehrlich said.
The default of Three Arrows Capital (“3AC”) on a loan from the Company’s subsidiary, Voyager Digital requires it to take “deliberate and decisive action now”, Ehrlich further said, adding that the bankruptcy process provides an efficient and equitable mechanism to maximize recovery. The Company continues to evaluate all strategic alternatives to maximize value for stakeholders, Voyager said.
To put things into context about the recent slump in crypto trade, the value of Bitcoin as a crypto asset has tumbled 55 per cent so far in 2022. The crypto market, at large, has fallen by about a third since it hit its peak sometime in November last year and left many investors poorer.