Voyager Digital Limited has filed for reorganization petition with the US Bankruptcy Court of the Southern District of New York. According to the media release shared by the firm, the filing is pending approval from the court.
Voyager Digital Limited is a US-based crypto-assets lender. The firm has now hit a hard rock, owing to the failure of its debtors to pay back the loans they took, coupled with the unexpected, extended volatility of the crypto market.
The CEO and co-founder of the company, Stephen Ehrlich stressed that the prolonged bearish fall of the crypto market, coupled with the inability of Three Arrows Capital (3AC) to pay back its borrowed funds, has made this move inevitable.
Voyager alleges that 3AC is yet to repay a loan amounting to approximately $650 million. The loan includes a total of 15,250 BTC and USD Coins worth $350 million, both digital assets. The company had also issued a default notice reminding Three Arrows Capital of its loan, but it is yet to be honored.
3AC however has recently been liquidated following an order from a court in the British Virgin Islands. The firm also folded up owing to the persistent fall of the crypto market. As part of the reorganization process, Voyager assures its stakeholders and customers of the security of their assets.
With approval from the court and other parties, the customers that have crypto assets in their account will receive exactly the equivalent value in exchange.
In the declaration of assets, Voyager noted that it has more than $110 million in cash and cryptocurrency assets at hand. The firm has $1.3 billion worth of digital assets stored on its platform.
In an earlier report, Voyager signed a loan agreement with Alameda Ventures. The agreement entitles the former to a cash of $200 million, coupled with 15,000 Bitcoin (BTC). The credit assets are meant to aid Voyager in scaling through the current market fall.
It is a bad season and a negatively unbelievable one for the crypto ecosystem. Digital assets service providers continue to layoff their staff and fold up, just to survive this prolonged winter season. Some, however, still keep hopes alive for a positive turnaround in the crypto market and are making strategic alliances.