Voyager Digital, a top crypto broker, has filed for bankruptcy, citing market volatility and the surprising collapse of Three Arrows Capital, just weeks after suspending withdrawals, trades and deposits on its platform.
The US-based company – and its two affiliates – said in a Chapter 11 bankruptcy filing in the Southern District of New York that they had between $1 billion and $10 billion in assets and more than 100,000 creditors.
Voyager Digital owed $75 million to Sam Bankman-Fried’s Alameda Research, which recently threw the broker a $485 million lifeline, and about $960,000 to Google, he disclosed in the file (PDF). Voyager did not name any other companies it owes money to.
“Voyager’s platform was designed to empower investors to access crypto asset trading with ease, speed, liquidity and transparency. While I strongly believe in this future, the prolonged volatility and contagion on crypto markets over the past several months, and the default of Three Arrows Capital on a loan from the company’s subsidiary, Voyager Digital, LLC, compels us to take deliberate and decisive action now,” wrote Stephen Ehrlich (pictured above), CEO of Voyager, in a press release.
“The Chapter 11 process provides an efficient and fair mechanism to maximize recovery,” he added.
Voyager said Three Arrows Capital, a high-profile crypto hedge fund that filed for bankruptcy last week, owed it more than $650 million. Three Arrows Capital, founded by Credit Suisse traders Zhu Su and Kyle Davies, managed around $10 billion in assets.
Three Arrows Capital owed a number of companies large sums of money. Crypto lender BlockFi, which also had exposure to 3AC, struggled to remain solvent after the hedge fund collapsed and agreed to be acquired by the US arm of FTX for up to $240 million a year. last week.
“Voyager is actively pursuing all available remedies to recover from 3AC, including through court-supervised processes in the British Virgin Islands and New York,” Voyager said in the press release.
Shares and symbolic value of Voyager fell on the news to new lows.
“During the reorganization, we will maintain operations. We intend to run certain customer programs without interruption. Trading, deposits, withdrawals and loyalty rewards on the Voyager platform remain temporarily suspended,” Ehrlich said in a tweet.