The bear market has pushed several projects down the drain. July did not start on a good note for Voyager Digital. The crypto broker decided to press pause on all trading, deposits as well as withdrawals. Just days after this event, the firm went on to file for Chapter 11 bankruptcy.
Late Tuesday, Voyager Digital went on to file Chapter 11 bankruptcy in the Southern District of New York. All of its business entities, Voyager Digital Holdings, Voyager Digital LLC as well as Voyager Digital, Ltd. were part of the filling. The firm is reportedly being represented by Kirkland and Ellis LLP.
The filing notes that there were over 100,000 creditors. The estimated assets ranged from $1 billion all the way to $10 billion. Liabilities followed suit and were around the same range.
Speaking about its latest move, the CEO of Voyager Stephen Ehrlich further said,
“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. The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.”
As the firm deals with bankruptcy, it entails over $110 million in cash along with a few cryptocurrencies. This will be employed to aid the daily operations of the firm. Customers that have USD deposits in their accounts would have to wait until reconciliation and fraud prevention processes by the Metropolitan Commercial Bank are completed.
FTX CEO noted among unsecured creditors
The filling entailed an array of names. However, the one that stood out was Alameda Research. The principal trading firm was founded by FTX CEO Sam Bankman-Fried back in 2017. Under the list of unsecured creditors, Alameda Research takes the top spot with $75 million.
Furthermore, it should also be noted that Voyager is the second high-profile crypto platform after Three Arrows Capital to file for bankruptcy in recent days. The community wasn’t very surprised by this move. While some of them went on to list all the assets that they would be losing, a few others were predicting the next platform that would file for bankruptcy.
Additionally, in an effort to spruce up things in the firm, four new independent directors were appointed. They were Matthew Ray at Voyager Digital Ltd., Scott Vogel at Voyager Digital Holdings, Inc., and Jill Frizzley along with Timothy Pohl at Voyager Digital LLC
The article will be updated over the next hour.