Crypto broker Voyager files for bankruptcy after 3AC hit

Crypto broker Voyager Digital has filed for bankruptcy in New York after suspending all trading, deposits, withdrawals, and loyalty rewards earlier this month.

The company’s other units – Voyager Digital Holdings, Voyager Digital LLC, and Voyager Digital Ltd – also filed for bankruptcy.

Based in the US, Voyager estimated that it had over 100,000 creditors. It also said both its assets and liabilities were in the range of US$1 billion to US$10 billion.

Photo credit: Voyager

“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,” said Voyager CEO Stephen Ehrlich.

In June this year, Voyager issued a notice of default to Three Arrows Capital (3AC) after the hedge fund failed to make loan payments that amounted to 15,250 bitcoins (currently about US$303 million) and US$350 million in USD Coin.

Voyager said it is “actively” pursuing all available remedies to recover the funds from 3AC.

The company has proposed a reorganization plan, under which it will resume customers’ account access. Users with crypto in their accounts will also receive proceeds from the 3AC recovery, common shares in the newly reorganized company, and Voyager tokens.

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Meanwhile, customers with US dollar deposits in their accounts will have access to those funds after a reconciliation and fraud prevention process with New York-headquartered Metropolitan Commercial Bank.

As part of the reorganization process, Voyager will file first day motions in order to maintain its daily operations. The company intends to continue paying its employees and keep up its primary benefits and certain customer programs.