Voyager Digital on the verge of bankruptcy after stopping transactions

The fall in cryptocurrencies over the past few months has affected the financial position of many firms in this segment. Voyager Digital, the crypto lending firm that stopped customer transactions last week, has applied for bankruptcy. The firm says it is looking at other options as well.

In the application for bankruptcy, Voyager Digital stated that it has more than one lakh creditors. This application has been made under Chapter 11 of Bankruptcy, which bars all legal matters and allows the firm to run as well as prepare a loss recovery plan. Stephen Ehrlich, the firm’s chief executive officer, said, “With the volatility and sell-off in the crypto market over the past few months, we have to take a big step due to default on a loan given to Three Arrows Capital.”

Voyager Digital recently served a default notice to Three Arrows Capital for failing to pay a loan of approximately 15,250 bitcoin and approximately $350 million in stablecoin USDC. A court in the British Virgin Islands has ordered the liquidation of Three Arrows Capital. Consultancy firm Teneo has been appointed as the liquidator.

Earlier, the co-founder of Three Arrows Capital had said in a tweet regarding the liquidation that the firm is committed to resolve it. Due to the slowdown in the crypto market, many firms in this segment are cutting their workforce to reduce costs. Coinbase, one of the major crypto exchanges, also recently decided to reduce its workforce by 18 percent. Headquartered in the US, the firm says that it has taken this step to cut costs in this difficult period of the industry. The Monetary Authority of Singapore (MAS) had said that Three Arrows Capital had given incorrect information about its relocation to the British Virgin Islands last year. Apart from this, in the last two years, it had also crossed its limit of assets under management. For this MAS has reprimanded the firm.

(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)

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