December 8, 2022

Over the winter, Voyager Digital backed down due to lingering liquidity issues. As a result, the company filed for Chapter 11 bankruptcy in July to help it with the situation after halting withdrawals on its platform.

The crypto winter of 2022 was a harsh one that led to the decline of almost all cryptocurrencies. Along with the collapse of Terra’s algorithm and ecosystem, the industry has entered a crisis.

Many crypto-related companies have struggled to keep their balance. However, not all of them have been able to weather the storm and the effects of a harsh downtrend on the cryptocurrency space.

Then came the sinking of some crypto companies, such as high-interest lending platforms. Some discontinued withdrawals while fighting bankruptcy. The first company to show signs of bankruptcy was Three Arrow Capital (3AC). Its inability to avoid the impact of a downtrend has created an infection for others.

Voyager Digital was launched in 2019 as a cryptocurrency lending platform. Its operations go beyond accepting customer deposits and paying interest on deposits. Also, the company uses the deposited funds to lend to other users. At the time of its bankruptcy filing, Voyager’s total liabilities were approximately $4.8 billion.

Voyager has auctioned off its distressed assets

In a recent development, a report from the Wall Street Journal revealed that Binance and FTX are struggling to acquire Voyager’s assets. Unfortunately, the two major cryptocurrency exchanges have come to the rescue. After the sad situation, Voyager sold its holdings to the public on September 13 this year. This action has seen some participants indicate their interest in the asset.

according to sourceBinance has offered above FTX for an additional $50 million. FTX has been in a buying spree since the year as it searches for potentially good assets. However, her moves have alarmed the company about the recurring downtrend in the cryptocurrency market.

The most important exchanges in the battle to buy Voyager Crypto Holdings
Cryptocurrency market trends sideways | source: Total Cryptocurrency Market Cap on

Bidding on Voyager’s assets saw Binance and FTX take the lead. But there are other participants such as CrossTower, a trading platform, and Wave Financial, a cryptocurrency investment manager. The winning bid is expected to be announced on September 29, although it may come sooner than expected.

Voyager’s liquidity problems came from a tie with 3AC

Voyager Digital went into bankruptcy, which led to it being declared bankrupt. This was primarily related to her financial tie of more than $650 million with Three Arrows Capital, a hedge fund platform.

At the time of the bankruptcy, Voyager loaned about $377 million to Alameda Research, a cryptocurrency exchange. Alameda Research is also owed by FTX CEO, Sam Bankman-Fried. Alameda Research purchased part of Voyager during the deposit, which is an ownership interest of 9.5%.

Featured image Pixabay, Chart:

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