Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Crypto lender Voyager Digital files for bankruptcy

Stock Markets Jul 06, 2022 02:17PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Stephen Ehrlich, CEO and Co-Founder Voyager Digital Ltd., speaks during the Piper Sandler Global Exchange and FinTech Conference in New York City, U.S., June 8, 2022. REUTERS/Brendan McDermid

By Shivam Patel, Sinead Cruise and Tom Wilson

(Reuters) -U.S. crypto lender Voyager Digital said on Wednesday it had filed for bankruptcy, becoming another casualty of a dramatic fall in prices that has shaken the cryptocurrency sector.

Crypto lenders such as Voyager boomed in the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. However the recent slump in crypto markets - sparked by the downfall of two major tokens in May - has hurt lenders.

New Jersey-based Celsius in June froze withdrawals and has hired advisers on a possible bankruptcy filing. Voyager froze withdrawals this month, as did another lender, Singapore's Vauld.

Last week, Voyager said it had issued a notice of default to Singapore-based crypto hedge fund Three Arrows Capital (3AC) for failing to make payments on a crypto loan totalling over $650 million.

3AC later that week filed for chapter 15 bankruptcy, which allows foreign debtors to shield U.S. assets, becoming one of the highest-profile investors hit by plummeting crypto prices. 3AC is now being liquidated, Reuters reported last week.

"The prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital on a loan from the company's subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now," Voyager Chief Executive Officer Stephen Ehrlich said in a statement.

CHAPTER 11

In its Chapter 11 bankruptcy filing on Tuesday, Voyager - based in New Jersey but listed in Toronto - estimated that it had more than 100,000 creditors and somewhere between $1 billion and $10 billion in assets, and liabilities worth the same value.

Voyager had last month signed an agreement with trading firm Alameda Ventures, founded by Sam Bankman-Fried, CEO of major exchange FTX, for a revolving line of credit. A filing with the U.S. Bankruptcy Court Southern District of New York showed that Alameda was Voyager's largest single creditor, with unsecured loans of $75 million.

Alameda did not immediately respond to a request for comment.

Chapter 11 bankruptcy procedures put a hold on all civil litigation matters and allow companies to prepare turnaround plans while remaining operational.

In a message to customers on Twitter (NYSE:TWTR), Ehrlich said the process would protect assets and "maximise value for all stakeholders, especially customers".

Voyager said on Wednesday it had more than $110 million of cash and owned crypto assets on hand. It intends to pay employees in the usual manner and continue their primary benefits and certain customer programs without disruption.

Voyager has hired Moelis (NYSE:MC) & Company and The Consello Group as financial advisers, Kirkland & Ellis LLP as legal adviser and Berkeley Research Group LLC as restructuring adviser.

Crypto lender Voyager Digital files for bankruptcy
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Nils Hullmann
Nils Hullmann Jul 06, 2022 3:43PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Buttcoin is next
Byron Ortega
Byron Ortega Jul 06, 2022 3:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What a scam lol
Corey DeLaplain
SniperSam Jul 06, 2022 3:15AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
...as is most of the cr@pto industry! I saw this hoax coming, feel bad for the suckers.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email