Days after suspending withdrawals on its platform, Voyager Digital is buckling much more under the weight of the uncertainties in the digital currency ecosystem and has filed for Chapter 11 Bankruptcy. The filing was made in the U.S. Bankruptcy Court of the Southern District of New York and will help the firm in restructuring its business in a bid to provide value for all of its users.
Filing for bankruptcy has been seen as the most logical way for the company to maintain continuity in the long run. As announced, it is cooperating with different stakeholders and it is exploring a diversified set of alternatives to ensure the continuity of its normal services.
“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.
“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, LLC, require us to take deliberate and decisive action now. The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.”
Amidst the ongoing plans for restructuring, Voyager Digital said it plans to continually pay its staff as before, a move that varies widely with other distressed crypto companies that have cut off on the workforce including BlockFi, Coinbase, and Gemini amongst others.
Voyager Digital Bankruptcy: a Growing Trend
As the crypto winter rages on and firms continue to face liquidity pressures, more outfits are beginning to succumb to their inabilities to keep up.
While 3AC is currently undergoing liquidation as ordered by a British Virgin Islands court, it also filed for Chapter 15 Bankruptcy in the US last week, a move that will notably protect its assets based in the United States.
3AC is Voyager Digital’s biggest debtor, and the firm is owing $650 million per notice of default issued to the company a few weeks ago.