Cash deposits make the voyage back homeInvestors in bankrupt crypto firm Voyager are finally starting to see symptoms of the crypto contagion ease as a court rules that their cash deposits can be sent back home.
- A US bankruptcy court granted Voyager approval to return $270m to its customers, driving its OTC shares up nearly 80% in two sessions – though prices are still only at $0.17. The brand applied for bankruptcy in July after suffering a blow from Three Arrows Capital and customers’ cash has been locked up ever since.
- Voyager also has plans to reopen cash withdrawals as early as next week after shutting them completely last month. The $270m that has been authorized for return to customers is only a small portion of the assets that have been frozen, and customers will be chomping at the bit to get their hands on their cash.
- The embattled lender has received a number of buyout offers since filing for bankruptcy and aims to wrap up a sale process in September, but with who? Sam Bankman-Fried’s FTX made an offer to buy some of Voyager’s crypto assets, but the brand said last week that the offer represents the lowest of several proposals they’ve received and the two are in talks over a higher bid.
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Another one bites the dustThe crypto plague claims yet another victim as Voyager Digital becomes the latest high-profile crypto firm to face bankruptcy.
- Voyager Digital filed for Chapter 11 bankruptcy protection late on Tuesday. It comes only a few days after the crypto lending firm halted all trading on its platform amid severe market volatility, having suffered a blow from Three Arrows Capital and its default on $650m worth of debt after its exposure to the Terra Troubles.
- Voyager listed liabilities of between $1bn and $10bn and assets in the same range, part of which includes a $500m loan agreement with Sam Bankman-Fried’s Alameda Research – which appaz wasn’t enough to even out the balance sheet. Voyager hopes the bankruptcy protection will help the platform continue to operate while also protecting customers.
- Some good news tho: Vauld could be saved. The crypto lender became the latest to halt withdrawals after seeing $197.7m taken off the platform since June 12, but it’s now been thrown a lifeline from competitor Nexo, which gave it 60 days of exclusive talks to chat about an all-equity acquisition. With FTX swooping in to save other beleaguered firms, consolidation in crypto is defos ramping up.
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Is the voyage over?Digital asset brokerage Voyager Digital becomes the latest to have its operations frozen by the current crypto winter as insolvency fears ramp up across the cryptoverse.
- Voyager Digital shares plunged 17% on Friday to close around a two-year low after making the “tremendously difficult” decision to halt customer trading, deposits, withdrawals and loyalty rewards amid a slew of looming margin calls and defaults across the crypto sector.
- It’s all part of the Three Arrows Capital fallout. 3AC is a big client of Voyager’s and a few days ago it failed to make a payment on a $670m loan as it plunged into bankruptcy, leading to mounting concerns of insolvency in the industry – the lender says it’s currently pursuing “strategic alternatives” that’ll best serve its customers.
- FTX’s Sam Bankman-Fried is here to save the day. The crypto billionaire’s Alameda Ventures has offered Voyager a revolving credit line of around $318m, and has just inked a deal with the option to buy big crypto lender BlockFi – who faces $80m in losses from the 3AC collapse – for up to $240m, as well as providing it with $400m in revolving credit.
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Contagion continues in the DeFi QuadrantMajor crypto lender Three Arrows Capital (3AC) defaults on a $670m loan given by Voyager Digital, cementing rumors of the firm’s insolvency.
- Fears of the dreaded DeFi contagion were stoked on Monday after Voyager Digital announced that 3AC had failed to meet the necessary payments on its loans of 350m of stablecoin USDC and 15.2k Bitcoin – which, combined, is worth around $670m at today’s prices.
- Voyager is now looking to turn the ship around, Captain Janeway style… at least according to CEO Stephen Ehrlich who said his team are “pursuing options” to continue to meet customer liquidity demands. Private equity firm Alameda Research have offered their hand in trying to get the warp core back online, financing them with a $500m revolving loan – $75m of which Voyager has already eaten into.
- VOYG tanked 24% on Monday, down to a price level not seen since July 2020. The drop follows on from a 42% plunge the week prior after Voyager announced its exposure to 3AC and reduced its daily withdrawal limit from $25k to $10k. Fellow crypto lender Celsius halted withdrawals entirely earlier in June – a fate Voyager investors will be hoping isn’t afforded to them.
The Voyage home gets interruptedCrypto investment firm Voyager Digital could use a Kathryn Janeway of their own to help it navigate its way out of regulatory cross-hairs.
🔍 Key points:
- Voyager Digital dumped 24% on Wednesday in its worst day of trading since hitting the public markets on December 23 – prices are down nearly 60% since then though, so it’s been a rough ride.
- And it’s about to get even rougher. The stock drop came on the back of news that Voyager has received cease and desist orders for its interest-earning cryptocurrency product from four different US states.
- Crypto lenders have been facing increasing scrutiny recently after attracting billions of dollars in deposits by promising high yields. Voyager rival BlockFi has recently agreed to pay the SEC $100m as part of a settlement, so a voyage deep into the bank accounts isn’t out of the question.
Illustration by TradingView
The regulatory Voyage never endsCanadian crypto broker Voyager sees investors say “bon voyage” after it gets hit with a class action suit.
- The stock lost 8.26% on Wednesday, erasing its pre-Christmas gains to take prices down 4% for the month.
- It’s been slapped with a class action lawsuit over hidden trading fees on the platform, and damages could exceed $1bn.
- Investors have had enough of deceptive business practices in the crypto world. Robinhood (HOOD), which also claims to be “100% commission free,” is facing a similar lawsuit for its payment for orderflow processes.
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