Voyager Digital – a cryptocurrency broker and lender – has declared bankruptcy. The crypto space continues to crash and it’s taking all kinds of companies down with it.
Voyager Digital Is Crashing with the Crypto Space
Voyager Digital is now the latest victim of the crypto space’s ongoing demise. A few weeks ago, the company suspended all withdrawals – clearly following in Celsius’ footsteps – and commented that the volatility the space was experiencing was unlike anything it had ever seen. Now, these withdrawal suspensions have been followed by the filing of Chapter 11 bankruptcy, thus shielding the firm from creditors so it can explore alternative means.
The good news is that the money is not necessarily lost. Customer funds are still intact with the company, and it doesn’t appear as though Voyager Digital is closing its doors for good anytime soon. These proceedings are simply in place to protect the firm. It cannot be sued, nor can customers take drastic measures to remove whatever assets have been stored within the exchange’s account system. The firm has stated that it’s looking at other ways to remain afloat while the crypto crash is in place.
Stephen Ehrlich – the chief executive of Voyager Digital – explained in a recent interview:
The prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital on a loan from the company’s subsidiary, Voyager Digital LLC, require us to take deliberate and decisive action now.
Three Arrows Capital was a crypto hedge fund that was ultimately forced to liquidate a few weeks ago as the crypto space showed no signs of recuperating. The digital currency arena has been on a steady decline for months, with the world’s number one digital asset by market cap (bitcoin) recently dipping into the low $20,000 range following a new all-time high of roughly $68,000 per unit just last November.
Other digital currencies have followed suit, such as Ethereum. The currency was trading for nearly $5,000 about nine months ago but has since dropped below $1,000. This is a record dip of more than 80 percent. The crypto space was initially valued at more than $3 trillion during the beginning of the year, though the space has fallen below $1 trillion.
Are Bad Actors Being Removed?
Carol Alexander – professor of finance at the University of Sussex business school – claimed that Voyager Digital wasn’t collapsing due to the downfall of the digital currency space, but rather because it is experiencing credit problems. However, she argued that this wasn’t a “bad thing” and commented:
During the latest bitcoin bubble, firms offering unsustainable yields have proliferated too rapidly. The shakedown we are witnessing now is welcomed by most authentic advocates of the digital asset ecosystem.
Court filings show that Voyager’s largest creditor was Alameda Research, which had unsecured loans worth more than $75 million.
Source: https://www.livebitcoinnews.com/crypto-lender-voyager-digital-files-chapter-11-bankruptcy/