Voyager Digital has filed for bankruptcy, the crypto lender said in a statement on Wednesday, a week after suspending withdrawals, trading and deposits to its platform as it sought additional time to explore strategic alternatives.
In its Chapter 11 bankruptcy filing on Tuesday, Toronto-listed Voyager estimated that it had more than 100,000 creditors and somewhere between $1 billion and $10 billion in crypto assets. The company also recorded the same range for its liabilities.
Chapter 11 bankruptcy procedures put a hold on all civil litigation matters and allow companies to prepare turnaround plans while remaining operational.
“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,” Voyager Chief Executive Officer Stephen Ehrlich said.
Many of the crypto industry’s recent problems can be traced back to the spectacular collapse of so-called stablecoin TerraUSD in May, which saw the stablecoin lose almost all its value, along with its paired token.
(Reporting by Shivam Patel in Bengaluru; Additional reporting by Ann Maria Shibu; Editing by Sherry Jacob-Phillips)