The bear market and the Three Arrows Capital (3AC) affair continue to have heavy repercussions for players in the crypto ecosystem. The exchange platform Voyager Digital has just declared bankruptcy, even though it had been experiencing difficulties for several weeks. We take a look at what this means for the future.
Voyager Digital in bankruptcy
As we explained last Sunday, Voyager Capital had already suspended withdrawals, to deal with its financial difficulties. The default of Three Arrows Capital had directly impacted the platform. Over the weekend, the CEO was reassuring, explaining that this pause would “preserve the future of the Voyager platform”.
But this future is now in danger. We have just learned that Voyager Digital has filed for bankruptcy with the Southern District of New York. According to the document, the company owes between $1 billion and $10 billion in assets to its creditors.
The move will allow for a “financial reorganisation” of the company. The aim is to maximise the collection process in order to satisfy customers. Stephen Ehrlich, Voyager Digital’s CEO, confirmed on Twitter today that Voyager Digital’s services would continue to be available during this process:
As part of this process, the proposed Plan of Reorganization would resume account access and return value to customers. Under this Plan, which is subject to change given ongoing discussions with other parties, and requires Court approval:
– Stephen Ehrlich (@Ehrls15) July 6, 2022
But not all. Withdrawals, deposits, exchanges and the Voyager Digital loyalty program will continue to be suspended throughout the bankruptcy process, as will the recovery plan.
What can customers expect
Stephen Ehrlich also says the plan will compensate affected customers.
Customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized Company, and Voyager tokens.
– Stephen Ehrlich (@Ehrls15) July 6, 2022
“Customers with cryptocurrencies in their account(s) will receive a combination of cryptocurrencies […], a sum from the 3AC recovery, ordinary shares in the newly reorganised company, and Voyager tokens in exchange. “
Voyager Capital had provided a loan of 15,250 bitcoins (BTC) and 350 million USD Coin (USDC) to 3AC. But Three Arrows Capital has been placed into liquidation by a court in the British Virgin Islands. As a reminder, the Singaporean investment fund was heavily exposed to the Terra project (LUNA), which had a domino effect.
As we can see, the repercussions of the Terra affair are still spreading throughout the ecosystem, with centralised projects being very heavily impacted. In the middle of a bear market, it is difficult to estimate where the earthquake will stop.
