Cryptocurrency brokerage and lender Voyager Digital has filed for bankruptcy, becoming the latest company to fold under the weight of the crypto crash.
The company confirmed on Wednesday that it has started a voluntary Chapter 11 bankruptcy proceedings in the US and will seek a recognition of the case in Ontario, Canada.
Voyager has been buffeted by the crashing cryptocurrency market, which also endangered several competitors.
Vauld and Celsius Network have so far been able to resist bankruptcy, but had to resort to restrictive control on withdrawals to stay in business.
Commenting on the latest developments, Voyager CEO Stephen Ehrlich said that the company will relaunch once a restructuring has been completed and resume account access.
“Comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers”, Ehrlich added.
“The prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital on a loan … require us to take deliberate and decisive action now”, the chief executive continued.
The bankruptcy proceedings have been filed despite assistance from Alameda Research, a company run by Sam Bankman-Fried, FTX’s chief executive. Voyager received a $510m line of credit to address immediate liquidity needs. The move failed, resulting in the now-filed bankruptcy proceedings.
How much longer Vauld and Celsius may resist is not clear. Vauld may have a way out, after information transpired that Nexo, may be attempting to buy out the platform.
A similar offer was tabled for Celsius Network earlier, but no information about a potential arrangement has come out of that.
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