Voyager Digital, a high-profile crypto broker, has filed for bankruptcy, citing market volatility and the sudden collapse of Three Arrows Capital, just weeks after it suspended withdrawals, trading and deposits on its platform.
The US-based company — and its subsidiaries — said in a Chapter 11 bankruptcy filing in the Southern District of New York that it has between $1 billion and $10 billion in assets and more than 100,000 creditors.
Voyager Digital owes $75 million to Sam Bankman Fried’s Alameda Research, which recently threw the broker a $485 million lifeline, and nearly $960,000 to Google, A statement in the deposit (PDF). Voyager did not name the other companies it owes money to.
“The Voyager platform is designed to empower investors by providing access to crypto-asset trading with simplicity, speed, liquidity and transparency. Although I strongly believe in this future, the prolonged volatility and contagion in the cryptocurrency markets over the past few months, and the default of three Capital stocks on the A loan from the company’s subsidiary, Voyager Digital, LLC, requires us to make informed and critical business decisions now,” Wrote Stephen Ehrlich (pictured above), CEO of Voyager, in a press release.
“Operation Chapter Eleven provides an effective and equitable mechanism to achieve maximum recovery,” he added.
Voyager said Three Arrows Capital, a high-profile crypto hedge fund that filed for bankruptcy last week, owes it more than $650 million. Three Arrows Capital, founded by Credit Suisse traders Zhu Su and Kyle Davies, has managed assets estimated at $10 billion.
Three Capital shares owe a number of companies large sums of money. Crypto lender BlockFi, also exposed to 3AC, rushed to stay solvent after the collapse of the hedge fund and agreed to be acquired by the US arm of FTX for $240 million last week.
“Voyager is actively seeking to pursue all available treatments for 3AC recovery, including through court-supervised processes in the British Virgin Islands and New York,” Voyager said in a press release.
Voyager’s stock and token value plunged in the news to new lows.
“During the reorganization, we will continue operations. We intend on some customer programs without interruption. Trading, deposits, withdrawals, and loyalty rewards on the Voyager platform remain temporarily suspended,” Ehrlich said in a tweet.