The crypto company Voyager Digital Files for Chapter 11 – Ledger Insights

Voyager Digital, the Toronto-listed crypto company that lent $ 650 million to bankrupt Three Arrows Capital, applied for Chapter 11 protection in New York’s bankruptcy court yesterday. At the end of the quarter to March 31, it said it had 1.2 million funded accounts.

Legal documents show that the assets are between 1 billion and 10 billion dollars, the same is true. A balance sheet was not filed, so the real deficit is currently unclear. Voyager asked to extend the deadline for sharing financial details. It had $ 5.8 billion in assets on the platform at the end of the first quarter.

The company says it currently has $ 1.3 billion in crypto-assets on its platform plus $ 110 million in crypto-assets and cash owned by the company. In addition, $ 350 million of client cash is segregated in a client account and should be returned in full to customers, subject to compliance requirements.

If creditors and the courts agree, the company plans to reorganize into a new company and compensate customers through a mix of returning some cryptocurrencies, any recovery from the Three Arrows debt, shares in a new co, and Voyager tokens.

“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,” said Stephen Ehrlich, CEO of Voyager.

Although detailed figures were not available, the largest 50 creditors were listed. Sam Bankman-Frieds Alameda Research organized a rescue operation of up to $ 500 million in June, but under the agreement, the company could only withdraw $ 75 million so far, making Alameda the company’s largest unsecured creditor. The other significant unsecured creditor is Google, which owes nearly $ 1 million.

There were three more customers with more than $ 5 million in assets, who owe a total of $ 22.8 million. The next forty-five largest customers owe a total of $ 75 million, ranging from $ 955,000 to $ 3.3 million. But the biggest concern will be for the smaller customers, of which there are probably more than a million.

As an idea of ​​how fast the company grew, at the end of December 2020 it had 43,000 funded accounts, compared to 1.2 million just 15 months later.

Kirkland & Ellis LLP are legal advisors and Berkeley Research Group is a restructuring adviser.

Apart from Three Arrows and Voyager, the lending platform Celsius is also in trouble and stopped customer withdrawals. It has reportedly refused to apply for Chapter 11 with $ 11.8 billion in assets on its platform as of May 17. On Monday, a much smaller crypto company Vauld also stopped withdrawals.