Following the Chapter 15 bankruptcy filing of collapsed crypto hedge fund Three Arrows Capital (3AC), one of its lenders, the public-listed crypto broker Voyager Digital filed for Chapter 11 bankruptcy in New York. According to a court filing, Voyager has claims of more than $650 million against 3AC. Voyager has approximately $1.3 billion of crypto assets and over $350 million in cash held at a For Benefit of Customers (FBO) account at Metropolitan Commercial Bank. The estimated number of creditors exceeds 100,000.
The shares of Voyager are listed on the Toronto Stock Exchange (TSX) with the stock ticker VOYG. The shares have lost more than 98% since peaking at C$25 in November 2021 and are currently oscillating around C$0.3.
Voyager secured credit lines from the investment arm of Alameda Research, the trading firm founded by billionaire CEO of cryptocurrency exchange FTX, Sam Bankman-Fried, and Voyager’s major investor.
The Alameda group provided credit lines, $200 million in cash and USD Coin and 15,000 bitcoin, which were supposed to expire at the end of 2024. According to the court filings, Alamada Research Ltd in the British Virgin Islands has $75 million in unsecured claims. On the other hand, Voyager lent Alameda Research $376 million. It seems to be a very complicated relationship between the companies of Sam Bankman-Fried and Voyager.
“While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital require us to take deliberate and decisive action now,” said Voyager CEO Stephen Ehrlich in a statement issued late Tuesday. “The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.“
According to a Voyager blog post, US dollar deposits are covered under the Federal Deposit Insurance Corporation (FDIC); users would be guaranteed a full reimbursement of up to $250,000. The Metropolitan Commercial Bank already confirmed that Voyager customer funds held by Metropolitan Commercial Bank are insured by the FDIC up to $250,000.
Besides Crypto exchange Blockchain.com has also been one of Three Arrow Capital‘s creditors. Numerous reports indicate that Blockchain.com has recently delayed payouts. This could be a sign of a liquidity crisis caused by the loans granted to 3AC that have now defaulted.
