Voyager Digital Becomes Latest Crypto Firm to File for Bankruptcy
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Voyager Files for Chapter 11 Bankruptcy in New York
On Tuesday, crypto lender Voyager Digital filed for Chapter 11 bankruptcy protection in the Southern District of New York, per Stretto data, a bankruptcy specialist. Both estimated liabilities and assets are in the range of $1 billion and $10 billion, with more than 100,000 creditors.
According to the filing, the company believes that "funds will be available for distribution to unsecured creditors." Voyager Digital Holdings Inc., Voyager Digital LLC, and Voyager Digital Ltd. all filed for bankruptcy.
Earlier last week, Voyager Digital, announced that it has temporarily suspended trading, deposits, withdrawals, and loyalty rewards. The firm said it wanted additional time to continue "exploring strategic alternatives with various interested parties" and that it will provide additional information at "the appropriate time."
3AC Filed For Chapter 15 Last Week
Voyager joins Three Arrows Capital (3AC) in filing for bankruptcy. However, 3AC filed a Chapter 15 petition tied to an ongoing liquidation effort ordered by a court in the British Virgin Islands.
A Chapter 15 bankruptcy protects a firm's US assets while liquidation is carried out in the British Virgin Islands. Additionally, it prevents creditors from seizing assets in the United States and is applicable for insolvency proceedings involving more than one country.
Meanwhile, Chapter 11 provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time.