CEO of Voyager Digital sold shares close to peak price
Voyager Digital (VYGVF) – Get Voyager Digital Ltd Report sold shares of the cryptocurrency platform and lender near its peak and a year and a half before the company entered bankruptcy proceedings, a media report said.
Voyager CEO Steven Ehrlich paid out the shares in February and March 2021. and the lender filed for bankruptcy in July 2022, CNBC reported, citing the Canadian Securities Administration.
Voyager shares skyrocketed from 7 cents per share in October 2020 to $26 per share by March 2021. Bitcoin rose 455% and Ether jumped 688% during the same period.
Crypto’s all-time highs, set in November, collapsed this summer, wiping $2 trillion from the cryptocurrency market.
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Disposal of shares
The CEO and the Delaware limited companies linked to him disposed of nearly 1.9 million shares in 11 sales totaling $31 million from Feb. 9 to March 31, 2021, according to data from the Canadian Securities and Exchange Commission.
The three largest of the transactions yielded nearly $19 million from the sale of 1.4 million shares. The sales were tied to a $50 million secondary offering by Stifel Nicolaus in February 2021, the website reported.
Voyager Digital stock peaked near $30 in the week following Ehrlich’s latest sale.
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In July 2022, Voyager would file for bankruptcy after they froze the assets of their customers.
Lending activities led to a fall
As a crypto trading platform, Voyager also provided lending and staking services, which are a type of reward for holding certain digital coins.
The company’s lending business led to its downfall: Voyager appears to have lent customers’ funds to crypto hedge fund Three Arrows Capital, also known as 3AC.
In June, 3AC defaulted on a $667 million loan provided by Voyager. Three Arrows Capital was forced by a court in the British Virgin Islands to go into liquidation.
The move led to Voyager suspending deposits, withdrawals and loyalty rewards on its platform.
“Customers with crypto in account(s) will receive in exchange a combination of crypto in account(s), proceeds from the 3AC recovery, common stock in the newly reorganized company and Voyager tokens,” Ehrlich wrote on Twitter. July 6.
In its bankruptcy filing, Voyager said it had custody of $1.3 billion in crypto assets among its 3.5 million active users.
Voyager had promised massive returns on digital assets, but could not sustain operations during the massive losses in the crypto market.
The FDIC later ordered Voyager to stop calling its products FDIC-insured, calling the claims “false and misleading.” Bank deposits are FDIC insured, unlike stocks and alternative assets.
