June 9, 2023

During the winter, Voyager Digital collapsed due to outstanding liquidity problems. As a result, the firm filed for Chapter 11 bankruptcy in July to help it deal with the situation after it stopped withdrawing on its platform.

The crypto winter for 2022 was a harsh one that upset almost all cryptocurrencies. Coupled with the collapse of algorithmic terra and its ecosystem, the industry was in crisis.

Many crypto-related companies struggled to maintain their balance. However, not all of them can weather the storm and impact of the strong bearish trend on the crypto space.

Then some crypto firms dive in, such as high-interest lending platforms. Some withdrawals have stopped while battling bankruptcy. The first firm to show signs of bankruptcy was Three Arrow Capital (3AC). The weather’s inability to influence bearish trends has created a contagion for others.

Voyager Digital was launched in 2019 as a crypto lending platform. Its operation revolves around accepting deposits from customers and paying interest on the amount deposited. Also, the firm uses the deposited funds to lend to other users. At the time of bankruptcy, Voyager had total liabilities of approximately $4.8 billion.

Voyager auctioned off its distressed 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 bid for help. Following its plight, Voyager auctioned its holdings to the public on September 13 this year. This action saw some participants indicating their interest in the resource

According to formula, Binance outbid FTX by an additional $50 million. FTX has been on a buying spree since the year as it looks for potentially good assets. However, its move has left the firm frustrated with the recurring bearish trend in the crypto market.

Voyager is the top exchange in the battle to buy crypto holdings
Crypto market trends aside Source: Crypto Total Market Cap on TradingView.com

Bidding for Voyager’s assets saw Binance and FTX leading the way. But 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 may come sooner than expected

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

Voyager Digital was hit by bankruptcy problems that led to its filing for bankruptcy. It was mainly linked to more than $650 million in financing deals with Three Arrows Capital, a hedge fund platform.

At the time of the bankruptcy, Voyager lent about $377 million to Alameda Research, a crypto trading firm. Alameda Research is also indebted to FTX CEO Sam Bankman-Fried. Alameda Research bought a chunk of Voyager at the time of its filing, a 9.5% equity stake.

Featured image Pixabay, Chart: TradingView.com

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