Although Voyager Digital claims to have over 100,000 creditors, their native token VGX has accumulated significant gains. A reason for the increase might be the attempts by the crypto lender to restructure its capital by buying back tokens.
The native token of crypto lender Voyager Digital started a rally after the verdict of the court on the 3AC case. Despite seeming a strange coincidence, it creates a turn of events given the issues both platforms have recently shared.
The History between Voyager Digital and Three Arrows Capital
Despite the collapse in the overall market, Voyager has faced many financial challenges, like various DeFi platforms. The platform recently filed for Chapter 11 bankruptcy in a New York court. That happened after they announced they would suspend all withdrawals, mirroring other companies.
The problems of Voyager Digital started in late June when they first issued a default notice for Three Arrows Capital (3AC). That measure followed the inability of the cryptocurrency hedge fund to make payments on a loan of over USD 700 million. The exposure included about 15,250 BTC and 350 million USDC.
The failed payment by 3AC and the decline in cryptocurrency prices were the primary factors behind the bankruptcy petition by Voyager Digital. CEO Stephen Ehrlich did not hesitate to say that the loan led the crypto lender to sign the motion.
VGX Grows Significantly after the Court Seizes the Assets of 3AC
Voyager Digital manages between USD 1 and 10 billion worth of cryptocurrency assets. Although the firm claims to have over 100,000 creditors, its native token VGX has recently posted gains of up to 586%. Despite being under threat of bankruptcy, its price went from USD 0.15 to a high of USD 1.01.
VGX is trading at around USD 0.488 and has accumulated a 140% gain over the last week. While its daily trading volume is above USD 442.06 million, its market capitalization is about USD 148.30 million, according to CoinGecko.
The bullish trend began after the news of a bankruptcy order a New York-based federal judge Martin Glenn. The court officer passed a motion to seize the assets of 3AC following the disappearance of Zhu Su and Kyle Davies. The co-founders of Three Arrows Capital reportedly hid to escape creditors seeking to recover their funds.
Three Arrows Capital, which had been in business for almost ten years, sat on assets worth around USD 10 billion in June. The ruling by Glenn allows the subpoena service to the founders of 3AC and the companies and institutions working with them.
The news of the court order and the favorable pricing of the VGX token came only hours apart. However, a reason for the increase in the price of the crypto asset might be the attempts by Voyager Digital to restructure its capital. The platform buys back tokens in bulk to create liquidity for its customers.
That company might also be planning to make an acquisition. If that happened, it might provide liquidity to the platform and drive the price of VGX higher.
By Alexander Salazar
