During the winter, Voyager Digital fell due to prominent liquidity issues. As a result, the company filed for Chapter 11 bankruptcy in July to assist it after it halted withdrawals on its platform.
The crypto winter of 2022 is a violent one, with nearly all cryptocurrencies plunging. Combined with the collapse of the algorithm Terra and its ecosystem, the industry is in crisis.
Many cryptocurrency-related companies are struggling to maintain a balance. However, not everyone can weather the storm and the impact of a harsh bearish trend on the cryptocurrency space.
Then came the drowning of some crypto companies, such as high-interest lending platforms. Some withdrawals stopped while battling bankruptcy. The first company to show signs of bankruptcy was Three Arrows Capital (3AC). It cannot withstand the effects of a bearish trend, thereby contagious to others.
Voyager Digital launched in 2019 as a crypto lending platform. Its business spans accepting deposits from customers and paying interest on the deposit amount. Additionally, the company uses the deposited funds to lend to other users. At the time of the bankruptcy filing, Voyager’s total liabilities were about $4.8 billion.
Voyager auctions off its distressed assets
In a recent development, a Wall Street Journal report revealed that Binance and FTX are vying to acquire Voyager’s assets. Unfortunately, both major cryptocurrency exchanges are looking for help. After its troubles, Voyager auctioned off its holdings to the public on September 13 this year. The move has seen some players express their interest in the asset.
according to resource, Binance offered $50 million more than FTX. FTX has been on a buying spree since this year as it looks for possible quality assets. However, its move has led the company to distress over the recurring bearish trend in the crypto market.
Bids for Voyager assets put Binance and FTX in the lead. But there are other players, such as trading platform CrossTower and crypto investment manager Wave Financial. An announcement of the winning bid is expected on September 29, but may come sooner than expected.
Voyager liquidity issues stem from relationship with 3AC
Voyager Digital has suffered bankruptcy, leading it to file for bankruptcy. This is largely related to its financial ties to more than $650 million in hedge fund platform Three Arrows Capital.
At the time of bankruptcy, Voyager lent about $377 million to crypto trading firm Alameda Research. Sam Bankman-Fried, CEO of FTX, also owes Alameda Research a debt. Alameda Research purchased a 9.5% stake in Voyager at the time of filing.
Featured image Pixabay, Chart: TradingView.com