Crypto Lender Voyager Files For Chapter 11 Bankruptcy Protection

Days after it suspended trading, deposits, and withdrawals on its platform, cryptocurrency lending platform Voyager Digital LLC VYGVF filed for Chapter 11 bankruptcy protection in New York, according to its court filing.

What Happened: As per the petition filed by Voyager, the company has over $110 million in cash and owned cryptocurrency assets on hand, which will provide liquidity to support day-to-day operations during the Chapter 11 process, in addition to more than $350 million cash held in a customer benefit account at Metropolitan Commercial Bank.

Voyager has approximately $1.3 billion of cryptocurrency assets on its platform, besides claims against Three Arrows Capital (3AC) of more than $650 million.

"The prolonged volatility and contagion in the crypto markets over the past few months, and the default of 3AC on a loan from the Company's subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now,” Stephen Ehrlich, CEO of Voyager, said in a statement.

Why It Matters: Voyager had earlier announced that its subsidiary had issued a notice of default to 3AC for failure to make the required payments on its previously disclosed loan of 15,250 Bitcoin BTC/USD and $350 million in USD Coins USDC/USD.

Three Arrows filed for Chapter 15 bankruptcy last Friday.

According to Voyager's reorganization proposal, customers with cryptocurrency in their account will receive a combination of those digital assets, proceeds from the 3AC recovery, common shares in the newly reorganized company, and Voyager tokens.

The plan also contemplates an opportunity for customers to select the proportion of common equity and crypto they will receive, subject to certain maximum thresholds.

Photo via T. Schneider on Shutterstock

Posted In: bankruptcyBitcoinThree Arrows CapitalVoyager DigitalCannabisCryptocurrencyNewsPenny StocksEventsTop StoriesMarkets

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.