Voyager Digital filed for Chapter 11 bankruptcy on Tuesday after suspending withdrawals and trading last week.

Voyager Bankruptcy Filing

The crypto market crash has claimed its latest victim, Toronto-based crypto lender Voyager Digital. On Tuesday, Voyager Digital filed for Chapter 11 bankruptcy protections in the Southern District of New York. Its two affiliates, Voyager Digital LLC and Voyager Digital Holdings were also included in the filing. With Voyager no longer in the picture, some investors are wondering what the best crypto loan sites are.

The lender estimated that it had about 100,000 creditors and crypto assets valued between $1 billion and $10 billion. The filing states the firm believes that funds will be available for distribution to unsecured creditors. But the firm also has liabilities more or less in the same range as its assets.

Filing Chapter 11 bankruptcy will enable the company to prepare turnaround plans because the procedure halts civil litigation matters while it remains operational.

CEO Stephen Ehrlich said on Twitter, “We strongly believe in the future of the industry but the prolonged volatility in the crypto markets, and the default of Three Arrows Capital, require us to take this decisive action.”

Voyager enabled investors to earn interest via staking, locking in cryptocurrencies for a specific period to receive rewards. Investors increase their chances of earning rewards by opting for the best crypto interest accounts.

Voyager’s Outstanding Loans

One of the biggest reasons for Voyager’s financial woes is the lending to Three Arrows Capital, ordered by a British Virgin Islands court to liquidate. Ehrlich mentioned Three Arrows Capital as one of the biggest reasons for its bankruptcy filing because it owed Voyager Digital millions of dollars in loans.

Voyager had issued a notice of default last month to Three Arrows Capital for a loan worth $675 million. If that wasn’t bad enough, Voyager’s loan book showed that 60% of it consisted of loans to Three Arrows Capital.

The lender’s court filing showed that it had $75 million in unsecured loans from Alameda and that the company also owed Google $1 million.

VGX Token Crash

It’s not a surprise that Voyager’s stock price has taken a massive beating since it filed for bankruptcy. Its share price closed at $0.27 on Tuesday, leaving the company with a 65 million Canadian dollar market capitalization. That’s a massive blow considering Voyager’s stock traded at over $20 in November 2021.

But it’s not only Voyager’s share price that crashed. Its native token, VGX, has been in a downtrend since November last year, but the bankruptcy filing has expedited the crash. VGX coin is currently trading at $0.21, a 96% loss in value since its all-time high of $5.9 set in November 2021.

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