Toronto (Canada)-based Voyager Digital has filed for bankruptcy under Chapter 11 in the Southern District Court of New York on July 5. Voyager has more than 100,000 users with assets worth from $1 to $10 billion. “We still have enough funds to pay off our unsecured creditors”, the company confirmed.
Amid the liquidity crisis, Three Arrows Capital (3AC) was the first crypto firm to file for bankruptcy on July 2. However, unlike Voyager Capital, 3AC filed for bankruptcy under Chapter 15 because other parties of interest involving more than one country. In the case of Voyager, this firm filed for bankruptcy under Chapter 11. According to Investopedia, Chapter 11 is the most complex form of bankruptcy. It allows the company to maintain business operations while reorganizing the company. The interests of creditors will be given top priority.
Voyager CEO Stephen Ehrlich later confirmed this news and felt Chapter 11 was the best route for his clients. This move is part of a “Plan of reorganization” that aims to protect assets on the platform and keep Voyager running. When implemented, the plan will allow customers to access their accounts again, and Voyager will “return value to customers.”
Besides, clients with US dollars in their accounts will be able to access those funds after a “reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank”.
Voyager Digital previously claimed Three Arrows Capital owes itself more than $662 million. 3AC has filed for bankruptcy and now Voyager has continued to join the list of bankrupt crypto firms because of the market collapse. Voyager suspended crypto trading activities from July 2 and finally filed for bankruptcy on July 5. The firm now has over $110 million in cash and crypto assets, $350 million it holds in an FBO account for customers, and $1,3 billion worth of crypto assets on the platform. Voyager also stated that it will pursue legal action to recover the fund from 3AC.
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