Voyager Digital Recordsdata for Chapter 11 Chapter

Key Takeaways

  • Voyager Digital has commenced voluntary Chapter 11 chapter proceedings within the Southern District of New York.
  • The corporate stated in a press launch that it was proposing a restructuring plan to make complete its collectors and prospects.
  • Voyager had vital publicity to Three Arrows Capital, which has additionally begun chapter proceedings.

Voyager Digital has filed for Chapter 11 chapter and begun the method of restructuring the corporate to fulfill its obligations to collectors and prospects. The corporate issued the information late Tuesday night time.

Bon Voyage

Voyager Digital has gone bust.

The troubled crypto lender introduced in a press launch late Tuesday night time that it had begun voluntary Chapter 11 proceedings within the U.S. Chapter Courtroom for the Southern District of New York. Based on the press launch, Voyager’s transfer is meant to “maximize worth for all stakeholders.”

Mentioned Voyager Digital CEO Stephen Ehrlich:

“This complete reorganization is one of the best ways to guard belongings on the platform and maximize worth for all stakeholders, together with prospects… Voyager’s platform was constructed to empower traders by offering entry to crypto asset buying and selling with simplicity, velocity, liquidity, and transparency. Whereas I strongly consider on this future, the extended volatility and contagion within the crypto markets over the previous few months, and the default of Three Arrows Capital (“3AC”) on a mortgage from the Firm’s subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive motion now. The Chapter 11 course of supplies an environment friendly and equitable mechanism to maximise restoration.”

Voyager claims to have over $110 million in money and crypto belongings available to help operations throughout the Chapter 11 course of. It additionally holds greater than $350 million in money in its For Good thing about Clients (FBO) account at Metropolitan Commerical Financial institution, roughly $1.3 billion in crypto belongings on its platform, and over $650 million in claims towards the collapsed crypto hedge fund Three Arrows Capital (3AC). The corporate said that it’s “actively pursuing all accessible treatments” to get better its funds from 3AC, together with court docket proceedings.

A Chapter 11 chapter supplies mechanisms for a corporation to proceed working whereas nonetheless considerably restructuring its obligations. This restructuring is required to be in the most effective curiosity of the corporate’s collectors.

The proposed restructuring plan is meant to revive account entry to prospects. Below the plan, prospects with crypto of their accounts would obtain some mixture of their holdings in crypto, proceeds from the 3AC restoration, widespread inventory within the newly reorganized firm, and Voyager tokens.

Clients holding {dollars} of their accounts would obtain entry to these funds “after [a] reconciliation and fraud prevention course of is accomplished with Metropolitan Business Financial institution,” the press launch stated.

Buying and selling, deposits, withdrawals, and rewards on the platform stay suspended.

Disclosure: On the time of writing, the creator of this piece owned BTC and a number of other different cryptocurrencies. 

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