Cryptocurrency lender Voyager Digital has filed for bankruptcy amid the crypto crash – a week after suspending transactions and issuing a default notice to collapsed Singapore hedge fund Three Arrows Capital.
Toronto-listed Voyager estimated its crypto assets held for customers at about $1.3 billion and its own holdings worth $110 million, plus $350 million in cash.
Chapter 11 bankruptcy procedures put a hold on all civil litigation matters and allow companies to prepare turnaround plans while remaining operational.
“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,” Voyager chief executive Stephen Ehrlich said.
Voyager said Three Arrows failed to make payments on a loan of 15,250 bitcoins ($324 million) and $350 million worth of USD Coin, a stablecoin.
Much of the recent crypto crash can be traced back to the spectacular collapse in May of the so-called stablecoin TerraUSD, which lost almost all its value along with its paired token.
- George Russell, with Reuters