Embattled crypto brokerage Voyager Digital is submitting for chapter 11 chapter after a outstanding borrower defaulted on a large mortgage.
In a brand new press release, Voyager says the agency has commenced a restructuring course of after crypto hedge fund Three Arrows Capital (3AC) did not pay again a mortgage value about $650 million.
Voyager Digital CEO Stephen Ehrlich says the agency is submitting for chapter on account of “extended volatility and contagion” within the digital property markets.
“This complete reorganization is one of the simplest ways to guard property on the platform and maximize worth for all stakeholders, together with prospects. Voyager’s platform was constructed to empower buyers by offering entry to crypto asset buying and selling with simplicity, pace, liquidity, and transparency.
Whereas I strongly imagine on this future, the extended volatility and contagion within the crypto markets over the previous few months, and the default of Three Arrows Capital (3AC) on a mortgage from the corporate’s subsidiary, Voyager Digital, requires us to take deliberate and decisive motion now. The chapter 11 course of gives an environment friendly and equitable mechanism to maximise restoration.”
The proposed plan would resume account entry and return worth to prospects, however is topic to courtroom approval, in accordance with the press launch.
“Clients with crypto of their account(s) will obtain in alternate a mixture of the crypto of their account(s), proceeds from the 3AC restoration, widespread shares within the newly reorganized firm, and Voyager tokens.”
Voyager’s announcement comes after prime buying and selling agency Alameda Analysis, based by FTX CEO Sam-Bankman Fried, led a $60 million fundraising spherical for the crypto lender in Might.
Earlier this month, Voyager halted all buying and selling and withdrawals on its platform, citing 3AC’s mortgage default. In response, Alameda gave Voyager an enormous credit score line consisting of practically $200 million in money and 15,000 Bitcoin (BTC).
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Featured Picture: Shutterstock/Yevheniia Rodina
