Crypto Lender Voyager Digital Files for Chapter 11 Bankruptcy

Voyager Digital filed for bankruptcy late Tuesday in New York, making it the second high-profile crypto firm to do so amidst market turmoil.

This happened a week after the crypto lender suspended withdrawals, trading and deposits to its platform as it sought additional time to explore strategic alternatives. In fact, it has hired Moelis & Company and The Consello Group as financial advisers, Kirkland & Ellis LLP as legal adviser, and Berkeley Research Group LLC as restructuring adviser.

In its Chapter 11 bankruptcy filing on Tuesday, which puts a hold on all civil litigation matters and allows companies to prepare turnaround plans while remaining operational, Voyager estimated that it had more than 100,000 creditors and somewhere between USD 1 billion and USD 10 billion in assets, and liabilities worth the same value.

In a statement posted online, Voyager Chief Executive Officer, Steven Ehrlich, clarified that reorganizing the company is the best way to protect the company's assets, and pointed the finger at Three Arrows, one of the highest-profile investors hit by the sharp sell-off in crypto markets that is being liquidated, for some of its issues.

He said, "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 the company's subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now.”