CNET
Voyager Digital holds billions of dollars worth of crypto assets and is the latest lender to suspend withdrawals.
The cold winds of crypto winter keep blowing. On Tuesday, cryptocurrency lender Voyager Digital filed for bankruptcy, becoming the latest crypto company to falter since the market began to crash in April. A buying, trading and lending platform, Voyager Digital is estimated to have between $1 billion and $10 billion in both assets and liabilities.
Voyager Digital CEO Stephen Ehrlich said in the filing that the company’s bad financial state was caused by two issues. First, high inflation and rising interest rates have caused crypto prices to dump, with bitcoin down 60% from its all-time-high in 2021. Second, Three Arrows Capital, a crypto hedge fund, defaulted on a $650 million loan issued by Voyager in March.
It’s an example of the contagion effect that’s helped drive down crypto in recent months. The contagion began with Luna, a cryptocurrency that collapsed in May after its associated TerraUSD stablecoin depegged. That crash wiped around $14 billion from the market, inflicting huge losses on firms holding TerraUSD and Luna. Singapore-based Three Arrows Capital is one such firm. The hedge fund filed for Charter 15 bankruptcy last week — just days after Voyager Digital issued a notice of default on the $650 million it had loaned 3AC.