Voyager Digital is now part of the growing number of CeFi companies that are suffering due to exposure to Three Arrows Capital, falling crypto asset prices, and other factors.

After a period of trading, withdrawals, and deposits, the crypto exchange Voyager Digital filed for bankruptcy under Chapter 11 at the Southern District Court of New York.

Voyager’s Chapter 11 bankruptcy filed stated that it could be held responsible for assets of up to $1 billion to $10 trillion and more than 100,000 creditors.

After the July 5th holiday in America, the troubled crypto exchange filed for bankruptcy. Voyager stated in a Wednesday statement that the move was part of a “Plan of Reorganization.” The plan would allow clients to access their accounts again and Voyager would return “value to customers.”

Stephen Ehrlich, Voyager CEO, stated in a July 6, tweet, that customers who have crypto in their accounts will be entitled to a combination crypto, proceeds of the Three Arrows Capital (3AC), recovery, common shares and Voyager tokens.

He confirmed that U.S. dollar accounts customers will be able access the funds after a “reconciliation process and fraud prevention is completed with Metropolitan Commercial Bank.”

Ehrlich stated that he believed Chapter 11 was the best option for his clients. He also assured that assets would be protected and Voyager will continue to operate.

Voyager stated that the company will file “First Day” motions as part of its reorganization process that will allow it continue operations.

Related: Keys lost at the Vauld: Singapore crypto-exchange freezes withdrawals

Voyager stated that it will continue to pay its employees as usual and continue certain customer programs and primary benefits without interruption, but trading, withdrawals, and loyalty rewards will be suspended.

Voyager’s clients and the platform were feeling headwinds after it entered into a loan agreement of $500 million with Alameda Research, a trading platform. This was to help cover its losses due to its exposure to 3AC, a crypto venture capital firm.

The platform then lowered its daily withdraw limit from $10,000 to July 1. On July 1, it announced that it would suspend trading, deposits and withdrawals and loyalty reward distributions.

Voyager Digital LLC, the company’s subsidiary, previously sent a notice to 3AC regarding failure to pay its loan of 15,250 bitcoin ( Bitcoin) or $350 million USD Coin( USDC).

Three Arrows Capital is currently going through Chapter 15 bankruptcy procedures and has been ordered to liquidate by British Virgin Islands. This suggests that Voyager may have a difficult time recovering the funds it borrowed.



Source link

About Author

Angie Byrd