What’s Voyager Digital?
Voyager Digital Ltd (OTC: VYGVF) is a digital asset brokerage that facilitated the buying and selling of over 100 crypto belongings and provided crypto fee options to each clients and retailers. Final week the corporate paused all withdrawals, buying and selling, and deposits on its platform, citing the present market circumstances following steps taken by Celsius, Babbel Finance, and Vauld.
The corporate filed for Chapter 11 bankruptcy safety late on Tuesday. This was regardless of a rescue mortgage final month from a buying and selling agency managed by FTX founder Sam Bankman-Fried. Within the submitting, the corporate claims it has over 100,000 collectors and liabilities between $1 billion and $10 billion. Its belongings embody $110 million of money and “owned crypto belongings” available and an additional $1.3 billion in crypto belongings on its platform.
Why did Voyager Digital enter chapter?
Voyager Digital is the newest casualty of the collapse in crypto costs that has sparked a extreme disaster within the digital belongings market. For the reason that starting of the yr, Bitcoin and Etherium have skilled large value declines of 57.9% and 69.8%, respectively. Gross sales of NFTs have additionally collapsed from a peak of $12.6 billion in January to simply over $1 billion in June. The chapter submitting got here one week after crypto hedge fund Three Arrows Capital collapsed. This triggered a contagion affecting Voyager Digital, to whom the hedge fund owed $650 million.
What is going to occur subsequent?
Voyager Digital goals to repay clients with crypto belongings, proceeds from the Three Arrows chapter, firm shares when it returns from insolvency, and “Voyager tokens”. Nonetheless, that is topic to court docket approval. It additionally holds $350 million of shoppers’ money in U.S. greenback deposits at Metropolitan Business Financial institution.
