Voyager Files for Bankruptcy Protection After Three Arrows Capital Defaults on $650M Loan
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Voyager Files for Bankruptcy Protection After Three Arrows Capital Defaults on $650M Loan

2m
4 months ago

CEO Stephen Ehrlich says "deliberate and decisive action" is needed now — and sets out how affected customers locked out of their funds will be reimbursed.

Voyager Files for Bankruptcy Protection After Three Arrows Capital Defaults on $650M Loan

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Voyager Digital has filed for bankruptcy protection after suffering losses of $650 million on a loan to the embattled crypto hedge fund Three Arrows Capital.

The company has confirmed that it has "commenced a voluntary Chapter 11 process to maximize value for all stakeholders" — and that it aims to allow customers to regain access to their accounts and their funds.

Voyager's CEO, Stephen Ehrlich, said a reorganization was the best way to protect the $1.3 billion in assets that are currently on the platform, adding:

"Voyager's platform was built to empower investors by providing access to crypto asset trading with simplicity, speed, liquidity, and transparency. While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital on a loan from Voyager Digital, LLC, require us to take deliberate and decisive action now."

Ehrlich warned the plan could change and would be subject to the court's approval.

But at present, customers with crypto in their accounts would receive some of their coins back — alongside proceeds from the recovery against Three Arrows Capital, shares in a newly reorganized company, and Voyager tokens.

Breaking down its current financial standing, Voyager said it currently has $110 million in cash and owned cryptoassets on hand — and this will serve as a crucial source of liquidity during the bankruptcy protection process.

A further $350 million in cash can be found in a For Benefit of Customers account at Metropolitan Commercial Bank — and customers who currently have dollars in their account would be reimbursed from this pot.

Voyager went on to stress that it is "actively pursuing all available remedies for recovery" from Three Arrows Capital after it failed to make required payments on two loans: one of 15,250 BTC, and another of $350 million in USDC.

While withdrawals, deposits and rewards remain suspended, the company stressed that it intends to continue paying employees.

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