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Voyager Digital crypto broker files for Chapter 11 bankruptcy

Voyager Digital cited ongoing market volatility and multimillion dollar loan default by Three Arrows Capital as major factors in its filing for bankruptcy.
TJ Denzer
TJ Denzer
Image via Voyager Digital
5

A major force in cryptocurrency brokerage is bowing out of the game. Voyager Digital is a group with around $1 billion to $10 billion USD in assets, as well as $1 billion to $10 billion in liabilities and around 100,000 creditors. With ongoing issues in the crypto space and a recent major default on a loan in the hundreds of millions, Voyager Digital has filed for Chapter 11 bankruptcy.

Voyager Digital officially submitted paperwork for Chapter 11 bankruptcy to the Southern District of New York on July 5, 2022, as reported by Forbes. Voyager Digital was recently heavily affected by the default of a loan to Singapore-based hedge fund Three Arrows Capital (3AC). The defaulted loan totaled to $675 million USD in mixed sums of bitcoin and stablecoin USDC. In an accompanying statement, Voyager Digital CEO Stephen Ehrlich pointed to this event as a major influencing factor among others in Voyager’s decision to file for Chapter 11 bankruptcy.

Voyager Digital was a contributor to Three Arrows Capital (3AC) which recently defaulted on a loan from Voyager to the tune of $675 million USD - a direct contributor to Voyager's filing for bankruptcy. [Image via Three Arrows Capital]
Voyager Digital was a contributor to Three Arrows Capital (3AC) which recently defaulted on a loan from Voyager to the tune of $675 million USD - a direct contributor to Voyager's filing for bankruptcy. [Image via Three Arrows Capital]

“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 require us to take deliberate and decisive action now,” Ehrlich said in his statement. “The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.”

Leading up to the filing, Voyager Digital claimed it had approximately $137 million in cash and assets on hand. It also revealed that it had used around $75 million of a $200 million loan in cash and bitcoin to oversee customer orders and withdrawals. Alameda Ventures, who supplied the loan, shared with Forbes that it does not expect to recoup the loan.

With Voyager Digital filing for Chapter 11 bankruptcy, it takes another multimillion-dollar crypto player out of the game. As the market continues to remain volatile, er remains to be seen if this is the last story we see of this nature, even in the near future. Stay tuned as we continue to follow ongoing stories in the cryptocurrency market here at Shacknews.

Senior News Editor
Senior News Editor

TJ Denzer is a player and writer with a passion for games that has dominated a lifetime. He found his way to the Shacknews roster in late 2019 and has worked his way to Senior News Editor since. Between news coverage, he also aides notably in livestream projects like the indie game-focused Indie-licious, the Shacknews Stimulus Games, and the Shacknews Dump. You can reach him at tj.denzer@shacknews.com and also find him on Twitter @JohnnyChugs.

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