Crypto lender Voyager Digital Holdings filed for bankruptcy on Wednesday, as its exposure to beleaguered hedge fund Three Arrows Capital devastated its finances.
The lender filed for Chapter 11 bankruptcy in the Southern District of New York, according to a court filing.
The firm’s estimated assets are over $1 billion, and it has more than 100,000 creditors. The move comes shortly after the crypto lender suspended withdrawals on its its platform.
Voyager had a massive exposure to Three Arrows Capital, which is also in the process of negotiating a bankruptcy. Three Arrows had recently defaulted on a $660 million loan from Voyager, which is also likely behind the lender’s recent filing.
Voyager bankruptcy spells trouble for crypto
Bitcoin and Ethereum prices dropped in response to Voyager’s filing, with BTC falling back below $20,000. The filing likely spells more pressure on crypto markets, as a bulk of Voyager’s assets are now likely to be liquidated to repay its debtors.
