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Voyager Files for Bankruptcy but Promises Users will be Compensated
Summary: Voyager has started a voluntary Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court of the Southern District of New York in an effort to gain maximum value for all its stakeholders, according to a blog post late Tuesday night. The company’s CEO, Stephen Ehrlich, took to Twitter to share their blog post. “This comprehensive ...
Voyager has started a voluntary Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court of the Southern District of New York in an effort to gain maximum value for all its stakeholders, according to a blog post late Tuesday night.
The company’s CEO, Stephen Ehrlich, took to Twitter to share their blog post.
“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,” said Ehrlich. “The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.”
Voyager is the second high-profile crypto firm to file for bankruptcy in recent days, with the first being Three Arrows Capital (3AC). However 3AC filed a Chapter 15 petition tied to an ongoing liquidation ordered by a court in the British Virgin Islands. In fact, it was partially 3AC’s fault for the Voyager filing, as 3AC did not repay a $650 million loan to the Toronto-based firm.
Voyager assured customers and the community in the blog post that this proposed reorganization plan, pending court approval, would allow customers with crypto in their accounts to receive a combination of crypto proceeds from the 3AC recovery, common shares in the newly reorganized company and Voyager tokens.
The company has over $110 million in cash and owned crypto assets on hands, which will provide liquidity to support the Chapter 11 process. They also have more than $350 million in cash held in the For Benefit of Customers (FBO) account by the Metropolitan Commercial bank. Lastly, Voyager has $1.3 billion of crypto assets on its platform plus a claim against 3AC for more than $650 million.
This announcement has left many people mortified, taking to Twitter to express their indignation. John Reed Stark, founder and former chief of the SEC Office of Internet Enforcement called Voyager’s mixed messaging between their customer service agreement and their marketing material as criminal conduct.
FatManTerra on Twitter tweeted a thread from Voyager’s subreddit with some very difficult messages to read. While their certainly were more heinous and appalling messages from the subreddit, here are a few that FatManTerra shared:
Mike Alfred, former CEO at BrightScope & Digital Assets Data noted that the one beneficial thing of 3AC, Voyager and potentially Celsius failing is the industry will adapt and move on with the lessons that these firms have taught to it.
Voyager’s announcement came just four days after the company temporarily suspended trading, deposits, withdrawals and loyalty rewards. Seems as though the writing was already on the wall.
Author: Tyler Irvin
Tags: bankruptcy,Three Arrows Capital,Voyager
Link: Voyager Files for Bankruptcy but Promises Users will be Compensated [Copy]
