IBD | Harrison Miller | Jul 6, 2022
Voyager Digital (VOYGVF) is the latest casualty from the Terra and LUNA cryptocurrency collapse. Voyager filed for Chapter 11 bankruptcy late Tuesday. The crypto broker, which has been suffering from the default and liquidation of Three Arrows Capital, suspended all activity on its platform last week. The Toronto Stock Exchange halted trading of the stock following the Voyager bankruptcy announcement. The exchange is expediting a review to potentially delist Voyager’s shares.
- Last week, A British Virgin Islands court ordered Singapore-based 3AC to liquidate following its default on Bitcoin loans. 3AC was unable to make payments on its 15,250 BTC, as well as the $350 million USDC it had borrowed from Voyager.
- On Friday, 3AC filed for Chapter 15 bankruptcy in the Southern District of New York.
- Chapter 15 allows the hedge fund to attempt to protect some of its assets from creditors.
- In its bankruptcy filing, Voyager reported it has over $110 million of cash and owned crypto assets on hand. It has about $1.3 billion of digital assets on its platform. Those assets include more than $650 million in claims against crypto hedge fund Three Arrows Capital (3AC).
Voyager Bankruptcy Plan
- Voyager’s Chapter 11 approach allows the broker to reorganize while continuing operations. Its current plan is to give customers a combination of proceeds from the 3AC recovery, common shares of the reorganized company and Voyager tokens. Court approval is pending for this effort to return at least some value to stakeholders.
- Customers holding U.S. dollars in their accounts will get access to their funds once Metropolitan Commercial Bank completes its reconciliation and fraud prevention process.
- Voyager will file customary “first day” motions that would allow it to maintain operations, pay employees and continue primary benefits.
- On June 22, Voyager signed a deal for a $500 million credit facility from Alameda Research. Alameda is led by CEO Sam Bankman-Fried, who also runs the cryptocurrency exchange FTX.
- Voyager’s bankruptcy filing lists $75 million of unsecured credit to Alameda Research and nearly $100,000 to Google. The company declined to name other firms it owes money.
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