On 5 July 2022 Voyager Digital Ltd. and its main operating subsidiaries filed voluntary Chapter 11 petitions in the US Bankruptcy Court for the Southern District of New York. CEO Stephen Ehrlich blamed prolonged market stress and a default by Three Arrows Capital on a loan from Voyager Digital, LLC — 15,250 bitcoin and $350 million USDC, a claim Voyager put above $650 million. The firm said it still had cash, an FBO bank account at Metropolitan Commercial Bank, and crypto on the platform. Trading, deposits, and withdrawals had already been suspended on 1 July.
This is the same credit-crisis family as Celsius’s June pause. It is a different company and a different docket. Do not clone that URL. A later bid from FTX, and FTX’s own collapse, are later plot. This page is the filing.
What happened
Voyager marketed itself as a simple way to buy crypto and earn yield. The yield was not a protocol. It was Voyager lending customer assets to institutions. One of those institutions was large enough that its default opened a hole the size of a bankruptcy. Customers who thought they had coins in an app had a claim in Chapter 11.
Why it matters
Interest on a login is compensation for credit risk, including the risk that one borrower is most of the book. A publicly listed ticker and a bank FBO account are not the same as coins you can withdraw to an address you control. See how buying crypto actually works. See the Celsius and Three Arrows piece for the fortnight that led here.
What happens next
A claims process, a recovery percentage, and years. We will not estimate what cents on the dollar you get. Nothing here is an instruction to buy, sell, or hold Voyager’s token or anyone else’s.
