According to Voyager Digital, it counts on $1.3 billion worth of crypto on the network. Chapter 11 allows the entity to carry out its activities while going through some improvements.
Voyager Digital filed for Chapter 11 bankruptcy following the obstruction of deposits and withdrawals announced last week.
The consequences of the collateral Crashdown of digital assets keep devastating every corner of the economy and keep wreaking havoc on the industry, with big players falling like weak trees. Voyager Digital filed to activate Chapter 11 and declare its official bankruptcy in New York, according to a July 5 court document.
According to the file, Voyager has several assets and liabilities registered between $1 billion and $10 billion declared for each. His approximate number of creditors counts over 100,000.
The entity declared that it possesses around $1.3 billion in crypto assets and more than $350 million in cash in the FBO (For Benefit Of) account for clients at Metropolitan Commercial Bank.
The firm intends to count on shelter for three divisions, Voyager Digital Holdings, Voyager Digital LLC, and Voyager Digital, Ltd.
On July 1, Voyager Digital stopped its activities regarding transactions, deposits, withdrawals, and loyalty rewards due to an unfavorable market situation.
Voyager Plans
Chapter 11 is one of the harsher methods to declare bankruptcy, as it allows an entity to remain active while it reforms its commitments.
Any suggested strategy to get restructured must be beneficial for the creditors, and if one does not get proposed, the creditors may bring up a new treatment.
CEO Stephen Ehrlich said that this reestablishment is the most optimal procedure to shield currencies on the network and strengthen the value for all stakeholders, including customers. He also expressed that the Chapter 11 process brings an effective system to consolidate a healthy recovery.
As part of the restructuration exercise, Voyager will manage the day one motion to allow it to continue its activities.
The suggested strategy to carry out the Reorganization would renew account access and return value to customers but would need a green light from the court.
Three Arrows Capital Recovery Rewards
The announcement also explained that customers holding crypto on the network would acquire a mix of their preserved currencies and revenues from the recovery of Three Arrows Capital (3AC), shares in the newly restructured entity, and Voyager tokens.
The statement also added that customers with USD will gain access to their funds after a fraud prevention procedure gets achieved along with Metropolitan Commercial Bank.
3AC, one of the most prominent crypto-focused hedge funds in the crypto space, had borrowed 15,250 BTC and $350 million USDC from Voyager. The Singapore-headquartered entity went to activate the Chapter 15 bankruptcy in New York on July 1.
By: Jenson Nuñez
