July 8, 2022 · less than 3 min read
The crypto brokerage firm has filed for Chapter 11 bankruptcy protection.
The chaos continues
Is 2022 the year of chaos for crypto? With Voyager becoming the latest in a long list of casualties, it’s difficult to say anything otherwise. Having suffered enormous losses from its exposure to crypto hedge fund Three Arrows Capital – which went bust last week – it commenced its own bankruptcy proceedings on Tuesday, filing with the US Bankruptcy Court for the Southern District of New York.
The filing lists assets of between $1 billion and $10 billion, while in a statement the company said that it has around $1.3 billion of crypto on its platform as well as $250 million in cash. With even these reserves not enough to keep it afloat from the crypto chaos spreading like wildfire, it really gives you an idea how bad things are getting.
Falling like dominos
The wider crypto market is in trouble. Fighting off a severe liquidity crisis, many platforms are struggling to face up to the floods of withdrawals from customers as coin prices plummet. June was the worst month yet for Bitcoin, down 38%. Voyager is yet more proof that the ‘crypto winter’ could be here.
But not all bankruptcies are the same. Voyager’s plan is to implement a restructuring process, which will help customers to receive reimbursement. Still fighting to get back its $650 million loan from Three Arrows Capital, there’s hope that users will receive a combination of crypto and the recovery funds, along with shares of the newly reorganized tokens. So, while there might still be some hope for Voyager ahead, hope is a dangerous thing when it comes to crypto.
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