Voyager Digital Files for Chapter 11 Bankruptcy

Crypto exchange and lender Voyager Digital filed for Chapter 11 bankruptcy on Tuesday, just four days after freezing customer assets.

“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,” CEO Stephen Ehrlich said in a statement. Ehrlich made a slight edit in a version of the statement published on Twitter hours after the filing became public, saying it would maximize value “especially” for customers.

The Toronto-based company submitted the filing in the Southern District of New York. It disclosed, in part, that it had more than 100,000 creditors and $1 to $10 billion in assets. The company said in its press release that it held more than “$110 million of cash and owned crypto-assets” to “provide liquidity to support day-to-day operations during the Chapter 11 process, in addition to more than $350 million of cash” held in a “For Benefit of Customers account.

“Voyager also has approximately $1.3 billion of crypto assets on its platform, plus claims against Three Arrows Capital (3AC) of more than $650 million,” the company added.

The Singapore-based Three Arrows Capital filed for bankruptcy in the same jurisdiction last week after a court in the Virgin Islands ordered it into bankruptcy. That company disclosed owing the distressed lender 15,250 bitcoin and $350 million in stablecoins, a total of about $655 million as of bitcoin’s Monday price. 3AC also owes money to a host of other companies — including Finblox, BitMEX, and Genesis Trading.

Voyager disclosed in Tuesday’s filing that its creditors include Google, to which it owes $1 million, along with FTX Exchange founder Sam Bankman-Fried’s Alameda Research Ventures LLC and Alameda Ventures Ltd. Voyager owes $75 million to the two companies combined.

The company on June 1 became the fourth in less than a month to freeze customer assets, citing “market conditions.”

“We strongly believe in the future of the industry,” Ehrlich added in his statement on Twitter. “But the prolonged volatility in the crypto markets, and the default of Three Arrows Capital, require us to take this decisive action.”

You can read the full bankruptcy filing above.