Crypto lending firm Voyager Digital has filed for bankruptcy days after suspending operations. Voyager announced yesterday, noting that it voluntarily started the Chapter 11 process to maximize value for stakeholders.

According to the announcement, the firm and its subsidiaries filed reorganization petitions with the US Bankruptcy Court of the Southern District of New York. Through this filing, Voyager seeks recognition of the bankruptcy case in the Ontario Superior Court of Justice pursuant to the Companies’ Creditors Arrangement Act.

The company claims it holds over $110 million in cash and owned assets. These funds will go toward funding day-to-day operations during the chapter 11 process.

Additionally, Voyager holds over $350 million in the For Benefit of Customers (FBO) account at the Metropolitan Commercial Bank. Users with USD deposits will access these funds after Voyager and the bank complete the reconciliation and fraud prevention process.

On top of this, Voyager has around $1.3 billion worth of crypto assets on its platform. Three Arrows Capital (3AC) also owes the firm’s subsidiary Voyager Digital LLC more than $650 million.

Voyager CEO Blames Crypto Winter and 3AC

Voyager CEO Stephen Ehrlich commented,

This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers.

According to him, the chapter 11 process offers an efficient and equitable mechanism to maximize recovery.

Ehrlich said this decision comes due to the prolonged volatility and contagion in the crypto market. He added that 3AC defaulting the $650 million from Voyager Digital LLC forced the company on this course of action.

This news comes after 3AC filed a Chapter 15 petition to protect its assets in the US. 3AC’s bankruptcy filing came after a British Virgin Islands court ordered its liquidation.

Crypto Platforms Get the Worst of the Bear Market

Voyager’s decision to sign for bankruptcy comes as most crypto lenders continue facing financial troubles. Celsius became the first crypto lender to halt withdrawals, swaps, and transfers on June 13 due to extreme market conditions. Since then, more crypto firms, including CoinLoan, CoinFLEX, and Voyager, to name a few, have either limited or halted services.

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