Cryptocurrency lender Voyager Digital has filed for bankruptcy protection, blaming volatility and contagion in the market, as well as the collapse of crypto hedge fund Three Arrows Capital.
Voyager filed for Chapter 11 bankruptcy protection, listing assets of between $1 billion and $10 billion and liabilities in the same range.
The company suffered a blow when Three Arrows Capital went bust last week, defaulting on a loan of 15,250 BTC and $350 million USDC. Voyager says it is pursuing "all available remedies" for recovering the funds, including through the court-supervised processes in the British Virgin Islands and New York.
The bankruptcy filing comes a week after Voyager suspended withdrawals, trading and deposits to its platform.
The firm has now set out a reorganisation plan the will require court approval and see customers with crypto in their accounts receive in exchange a combination of that crypto, proceeds from the Three Arrows Capital recovery, common shares in the newly reorganised company, and Voyager tokens.
"This comprehensive reorganisation is the best way to protect assets on the platform and maximise value for all stakeholders, including customers," says Stephen Ehrlich, CEO, Voyager.