Voyager puts on a brave face as it files for bankruptcy

Crypto lender Voyager filed for Chapter 11 bankruptcy, but the company’s CEO refuses to concede defeat.

Business partners discussing bankruptcy proceedings in a sunny room

Voyager, a centralized crypto lender, filed for bankruptcy in the Southern District of New York Wednesday morning. The company’s CEO Stephen Ehrlich blamed “the prolonged volatility in the crypto markets and the default of Three Arrows Capital.”

Chapter 11 bankruptcy proceedings allow the company to continue operating throughout the restructuring process. Ehrlich vowed that they would, even as trading, deposits, withdrawals, and loyalty rewards remain suspended since July 1.

The move signals a deep trouble for the company, but Voyager appeared to believe that a recovery was still possible as it sought to avoid the word “bankruptcy” as much as possible, referring instead to a “financial restructuring” and a “process to maximize value for all stakeholders.”

If Voyager’s recovery plan wins court approval, customers whose assets have been frozen would receive a “combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized company, and Voyager tokens,” Voyager stated in a press release. The company said it had $110 million in cash and crypto assets, plus $350 million of cash held in the For Benefit of Customers (FBO) account at Metropolitan Commercial Bank.

To navigate the bankrupcty proceedings, Voyager hired Moelis & Company and The Consello Group as financial advisors, Kirkland & Ellis as legal advisors, and Berkeley Research Group as restructuring advisor. Four new directors with background in restructuring and bankruptcies have also been onboarded.