Cryptographic platform Voyager Digital He filed for Chapter 11 Bankruptcy on July 5 in the Southern District of New York.
The company moved four days after filing for bankruptcy because another key industry player, Three Arrows Capital (3AC), was unable to pay $ 80 million in margin trading debt to derivatives exchange derivatives. I did.
According to a press release dated June 27, 3AC was unable to keep up with Voyager’s debt of 15,250 Bitcoins and US $ 350 million.
“Voyager Digital LLC has issued a default notice to Three Arrows Capital (” 3AC “) because it did not make the required payments for the previously disclosed 15,250 BTC loan. $ 350 million USDC. “
CEO Voyager said this “maximizes recovery.”
In recent weeks, CeFi companies have announced a freeze on withdrawal to stop liquidity spills. The industry is worried about which companies will be affected and what will happen next.
In the case of Voyager, after receiving a $ 200 million loan from Alameda Ventures on June 22, there was a glimpse of hope that the company could settle. The recent news that Voyager resumed withdrawals for customers who submitted requests before it stopped on June 30 was another positive development.
However, the announcement on Tuesday that it filed for Chapter 11 bankruptcy was a blow to Voyager’s stakeholders.
Voyager CEO Stephen Erich He issued a statement blaming market volatility and 3AC loan defaults. He described the bankruptcy filing as “intentional and decisive action” to “maximize recovery.”
“I strongly believe in this future, but the long-term volatility and transmission of the crypto market over the past few months, and the default of the company’s subsidiary Voyager Digital, a loan from LLC, Three Arrows Capital (” 3AC “). For us to take prudent and decisive action now. The process in Chapter 11 provides an efficient and equitable mechanism for maximizing recovery. “
Chapter 11 Bankruptcy
Chapter 11 A type of bankruptcy that allows debtors to reorganize their businesses. More appropriately, in most cases, the company will continue to operate while the recovery plan is in place. This maintains cash flow and assists in the repayment process.
During such proceedings, courts often help businesses restructure their debts and obligations. However, this also means that certain decisions, such as the sale of assets, cannot be acted upon without the court’s remarks.
“This version of bankruptcy gives the debtor a new start, but the conditions are subject to the fulfillment of the debtor’s obligations under the restructuring plan.”
The Submission to court Shows that the company “believes” that it has enough capital to pay the “unsecured creditors”. Voyager customers fall into this category.
