Best for All Stakeholders: 3AC Disaster "Voyager" Files for Bankruptcy Protection

Despite claiming to hold over $1.6 billion in crypto assets and cash, cryptocurrency broker Voyager has filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. With an estimated over 100,000 creditors, the company will undergo financial restructuring to return assets to users.

Restructuring Plan

The cryptocurrency broker Voyager has suspended deposits, withdrawals, and trading after owing $650 million to 3AC, an investment firm backed by Three Arrows Capital, as announced on 7/2.

According to a press release by Voyager, Voyager Digital Ltd., listed on the Toronto Stock Exchange under the symbol VOYG, has filed for bankruptcy protection in the Southern District of New York.

CEO Stephen Ehrlich stated:

The comprehensive restructuring is to safeguard platform assets and is the best way to maximize value for users and all stakeholders. The market volatility and 3AC's debt over the past few months have necessitated careful and decisive action.

Voyager Assets

Voyager claims the current assets are as follows:

• $110 million in cash and proprietary crypto assets for bankruptcy process operations
• $350 million held by Metropolitan Commercial Bank for returning user assets
• $1.3 billion in crypto assets held by Voyager platform
• $650 million debt owed by 3AC

The proposed restructuring plan is expected to begin returning assets to users after account withdrawals resume, potentially using 3AC debt, company shares, Voyager tokens, etc. However, the specific plan is subject to court approval and may change.

FDIC Insurance in Doubt

Voyager had obtained FDIC insurance for USD deposits as early as 2019, meaning that user-held USD at Voyager is FDIC-insured and eligible for up to $250,000 in compensation in cases like bankruptcy.

According to an official announcement, CEO Stephen Ehrlich also mentioned in a recent tweet that "USD depositors" will be able to retrieve funds after reconciliation with Metropolitan Commercial Bank.

However, while Voyager initially used FDIC as a marketing tool, it is now uncertain if FDIC insurance covers "stablecoins," and the community has expressed concerns about Voyager's misleading marketing practices.