Over the winter, Voyager Digital went under due to unresolved liquidity issues. As a result, the firm filed for Chapter 11 bankruptcy in July to help shore up the situation after halting retreats on its platform.
The crypto winter of 2022 was a drastic one that brought down almost all cryptocurrencies. Along with the collapse of algorithmic Terra and its ecosystem, the industry is thrown into crisis.
Many cryptocurrency-related companies have struggled to keep their balance. However, not everyone could weather the storm and the effects of the sharp bearish trend on the crypto space.
Then there was the drowning of some crypto firms, such as high-interest lending platforms. Some of the halted withdrawals in the fight against bankruptcy. The first firm to show signs of insolvency was Three Arrow Capital (3AC). His inability to overcome the impact of the bearish trend created contagion for others.
Voyager Digital was launched in 2019 as a crypto lending platform. His work includes accepting client deposits and paying interest on deposited amounts. Also, the company uses the deposited funds for lending to other users. At the time of the bankruptcy filing, Voyager had total liabilities of approximately $4.8 billion.
Voyager sold its troubled assets
In a recent development, a Wall Street Journal report revealed that Binance and FTX are battling to acquire Voyager’s assets. Unfortunately, two major crypto exchanges have asked for help. After its dire situation, Voyager sold its ownership to the public on September 13 of this year. In this action, some participants showed their interest in the property.
According to source, Binance offered more than FTX for an additional $50 million. FTX has been involved in a buying spree since last year as it looks for possible good assets. However, its moves have left the firm unsettled by a recurring bearish trend in the crypto market.
The bidding for Voyager’s assets has seen Binance and FTX take the lead. But there are other participants such as CrossTower, a trading platform, and Wave Financial, a crypto investment manager. The announcement of the winning bid is expected on September 29, although it could come sooner than expected.
Voyager’s liquidity problems stemmed from its relationship with 3AC
Voyager digital was hit by an insolvency problem that led to a bankruptcy filing. This was largely related to his over $650 million financial connection with Three Arrows Capital, a hedge fund platform.
At the time of the bankruptcy, Voyager lent about $377 million to Alameda Research, a cryptocurrency trading firm. Alameda Research also owes FTX CEO Sam Bankman-Fried. Alameda Research bought a 9.5% stake in Voyager during the filing.
Featured image Pixabay, Chart: TradingView.com