Crypto Bankruptcies Continue to Hit the Market – What's at Stake for Your Crypto?
The rise of liquidation of industry-leading cryptocurrency platforms and institutions is set to be a recurring negative trend, with Voyager and Bittrexr being the latest addition.
The recent spate of bankruptcy filings has resulted in losses for investors, who are uncertain about the longevity of the digital finance sphere and the regulatory landscape.
Renowned crypto broker Voyager Digital filed for Chapter 11 bankruptcy protection on July 6th, 2022, becoming one of the casualties of chaos in the digital financial markets.
The legal filing took place in the United States Bankruptcy Court for the Southern District of New York.
According to the broker statement, the filing included assets and liabilities worth $1 billion and $10 billion. The platform stated it had $1.3 billion of digital assets and over $350 million in fiat.
The catalyst for Voyager's downtrend was its exposure to Three Arrow Capital, an emerging crypto hedge fund, which went bust a week before the platform filed for bankruptcy.
The hedge fund defaulted on a series of loans from crypto-based industries and companies, including $650 million from Voyager.
The exchange platform tried to trigger a rebound powered by a buyout from FTX and then Binance U.S.; however, the purchase strategy failed to amass significant traction, which led to a collapse of both deals.
The legal battle is ongoing, and stakeholders are expected to receive around 35% of their funds as fiat or crypto in the coming months – nearly a year after all accounts were frozen.
The recent bankruptcies of Voyager and Bittrex, two of the most prominent cryptocurrency exchanges, have left investors stuck due to the inability to access their funds or assets.
The case of Bittrex caused a wider buzz as it
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