Cryptocurrency broker Voyager Digital has joined the growing list of cryptocurrency companies seeking bankruptcy protection from their creditors amidst the scary market downturn after a very poor first half of the year.
The cryptocurrency platform filed for Chapter 11 bankruptcy in the Southern District of New York on 5th July 2022. Voyager’s filing comes four days after another giant cryptocurrency player Three Arrows Capital (3AC) filed for Chapter 14 bankruptcy after they failed to repay their margin trading debt worth over $80 Million to Deribit derivative exchange.
A press release on 27th June revealed that Three Arrows Capital owed Voyager $350 million USDC and 15,250 Bitcoin. The report also confirmed that Three Arrow’s Capital had defaulted on the payments severally before declaring their insolvency.
In Voyager’s case, cryptocurrency market observers believed the company could stay solvent, especially after a $200 Million loan from Alameda ventures on 20th June 2022. However, on Tuesday, Voyager announced that they had filed for bankruptcy to the disappointment of their stakeholders who did not see the announcement coming.
CEO Stephen Ehrlich blamed the current market uncertainty and Three Arrow Capital’s loan default as the primary reasons the company had to announce its difficult decision.
Recent weeks have seen finance corporations announce withdrawal freezes in order to stifle the outflow of liquidity. The current financial climate has fostered fear among companies, investors, consumers and casual observers as more and more companies are making difficult financial decisions in order to stay solvent.
The industry is right now on its toes in dreaded anticipation of which companies are heavily affected and what will happen next. Three Arrows Capital and Voyager Limited are just a few financial companies that are finding it difficult to stay afloat in the wake of the severe economic downturn that has reduced total trading volumes while increasing liquidity outflows.
Featured image source: BeInCrypto
