3AC files for bankruptcy as Voyager Digital suspends withdrawals
A Chapter 15 bankruptcy is a decision that protects a company’s US assets while liquidation is carried out in the British Virgin Islands. Additionally, it prevents creditors from seizing assets in the United States and applies to insolvency proceedings involving more than one country.
According Bloombergthree representatives of the Singapore-based crypto hedge fund firm filed for bankruptcy protection in New York on July 1.
The liquidation of 3AC was ordered by a court in the British Virgin Islands on June 29, as reported CryptoPotato. The motion argued that the “liquidation would be a significant moment in the current dismantling of the cryptocurrency industry.”
Law firm Latham & Watkins is representing three Arrows Capitals, Bloomberg confirmed.
Voyager Digital suspends trading
In the wake of 3AC’s bad debts, crypto brokerage Voyager Digital has become the latest in a long list of companies suspending operations.
On July 1 at 2:00 p.m. EDT, the company halted transactions, deposits and withdrawals, according to a company announcement.
“It was an extremely difficult decision, but we believe it is the right one given current market conditions,” commented Stephen Ehrlich, CEO of Voyager. He said the company would “continue to explore strategic alternatives with various interested parties” before to add:
“Voyager is actively pursuing all available remedies to recover from 3AC, including through the court-ordered liquidation process in the British Virgin Islands.”
Earlier this month, Voyager Digital released a statement revealing that it had approximately $500 million in exposure with Three Arrows. He issued a notice of default “for failure to make required payments on his previously disclosed loan of 15,250 BTC and $350 million USDC.”
Last month, Voyager announced a loan agreement involving $200 million in cash and USDC and a 15,000 BTC loan with Alameda to mitigate some of this 3AC exposure.
Crypto winter deepens
Waves of negative sentiment continue to ripple through the crypto markets, resulting in another $23 billion leaking in the past 24 hours.
The 4.3% collapse in market capitalization has brought the total back below $900 billion as concerns over the final capitulation begin to mount.
Bitcoin weakened 4.6% as it falters towards $19,000, while Ethereum risks falling into triple-digit territory after falling 3.6% on the day.
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