Voyager Digital has filed for Chapter 11 bankruptcy in the Southern District of New York, just days after suspending trading, withdrawals, and deposits.
Voyager explained in a statement on Wednesday that the decision is part of a “Plan of Reorganization,” which when implemented will allow clients to reaccess their accounts and Voyager to “return value to customers.”
Voyager Digital plans overhaul
According to Voyager’s Chapter 11 bankruptcy filing, it owes more than 100,000 creditors ranging from $1 billion to $10 billion in assets.
CEO Stephen Ehrlich explained the company’s proposed strategy, under which clients holding cryptocurrency in their accounts would receive a mix of cryptocurrency, money recovered from Three Arrows Capital (3AC), common shares in the newly reorganized business, and Voyager tokens.
Additionally, he gave assurance that clients having U.S. dollars in their accounts will be able to access their assets following the completion of a “reconciliation and fraud prevention process with Metropolitan Commercial Bank.”
Ehrlich guaranteed that the decision would protect platform assets and that Voyager will continue to operate in the same Twitter thread where he stated that, after taking all relevant aspects into account, he believed Chapter 11 was the best course of action for his clients.
Maintaining operations
Voyager stated that as part of the reorganization process, the business will file “First Day” motions to continue operating.
The company stated that it aims to pay its staff as usual and to maintain their “primary benefits and certain customer programs without interruption,” but that trading, deposits, withdrawals, and loyalty incentives will be discontinued.
Voyager and its clients were hit by headwinds when the lending platform agreed to a $500 million loan with trading firm Alameda Research to cover losses from its investment in crypto venture capital firm 3AC.