Crypto broker firm Voyager Digital is about to sink with billions of dollars of investor funds.
A few days ago, Voyager Digital, a crypto brokerage firm, halted trading, and all transactions on its platform – both deposits and withdrawals. This came after the crypto market went on a downward spirilla, forcing some companies to be liquidated. Today Voyager Digital is filing Chapter 11 bankruptcy in New York, a move that could see over 100,000 investors lose their funds. Voyger Would Be represented by Kirkland and Ellis LLP.
According to Investopedia: “Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs, debts, and assets, and for that reason is known as “reorganization” bankruptcy. Chapter 11 is the most complex form of a bankruptcy proceeding. A Chapter 11 bankruptcy allows a company to stay in business and restructure its obligations.”
Assets Vs Liabilities
Apparently, the firm holds assets worth between $1 billion and $10 billion. Interestingly, it owes liabilities amounting to the same range. That’s according to a petition filed. In the petition, the firm seeks legal rights to go bankrupt, a position that could greatly disadvantage its creditors. Kirkland and Ellis LLP is the name of the legal firm representing the crypto broker in the petition – according to court documents.
No Operations
A few days ago, the crypto firm resulted to suspending all trading, a move that followed a default notice in which the firm explained to a large creditor, Three Arrows, that it was unable to repay its loans due to deteriorating market conditions.
Granted, Voyager and Three Arrows aren’t the only crypto-related firms to feel the pinch of the mega fall of crypto prices over the last month. Another company, named Celsius, also went down in liquidation.
Is The Market Doomed?
There has been a lot of talk about the current crypto winter lasting for months. Some even say it could last a few years before things can go back to normal. However, the crypto market is known for its extreme volatility, especially at a time when the world is about to enter a severe period of economic recession. It remains to be seen whether the crypto market will hold up as the alternative to fiat inflation.
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Source: https://thecryptobasic.com/2022/07/06/voyager-digital-has-filed-for-bankruptcy-in-new-york/?utm_source=rss&utm_medium=rss&utm_campaign=voyager-digital-has-filed-for-bankruptcy-in-new-york