After a well-known borrower missed their payment on a significant loan, the troubled crypto brokerage Voyager Digital has filed for chapter 11 bankruptcy.
Following the $650 million debt default by crypto hedge fund Three Arrows Capital (3AC), Voyager said the company has started a reorganization procedure.
Stephen Ehrlich, CEO of Voyager Digital, claims that the company’s bankruptcy filing is a result of “prolonged volatility and contagion” in the markets for digital assets.
“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers. 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, and the default of Three Arrows Capital (3AC) on a loan from the company’s subsidiary, Voyager Digital, requires us to take deliberate and decisive action now. The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.”
According to the press release, the suggested plan would restore account access and return value to users, but it is subject to judicial approval.