11X Stock Market Accelerator Summit

Eric Fry reveals how an A.I.-based secret could make you up to 11 times RICHER on the same stocks you’re investing in now… without using options, leverage, or anything risky.

Wed, September 27 at 8:00PM ET

Voyager Digital Filed for Chapter 11 Bankruptcy. What Does That Mean for Crypto Customers?


  • Voyager (VYGVF) will remain in business as it reorganizes under Chapter 11 bankruptcy.
  • Users with U.S. dollars on the platform will receive it back after a “reconciliation and fraud prevention process.”
  • Shares of VYGVF are currently down over 95% year-to-date.
Voyager Digital - Voyager Digital Filed for Chapter 11 Bankruptcy. What Does That Mean for Crypto Customers?

Source: T. Schneider / Shutterstock

Trading of Voyager Digital (OTCMKTS:VYGVF) stock is currently halted after the company announced it will pursue Chapter 11 bankruptcy. The cryptocurrency brokerage also disclosed it has roughly $1.3 billion in crypto assets on its platform. In addition, it has more than $350 million of cash held in its For Benefit of Customers (FBO) account at Metropolitan Bank.

Last week, Voyager announced the suspension of all trading, withdrawals, deposits and loyalty rewards. The company also suspended its debit card, and customers were advised to pause all direct deposits and automatic payments. Voyager attributed the suspension due to losses sustained from the downfall of crypto hedge fund Three Arrows Capital (3AC). 3AC currently owes the crypto brokerage more than $650 million due to a loan default.

So, the big question still remains. What will happen to customer’s assets on the platform?

What Does Chapter 11 Bankruptcy Mean for Voyager Digital Crypto Customers?

Chapter 11 bankruptcy allows the debtor, or Voyager, to remain in business while pursuing a debt reorganization plan. The plan must be in the best interest of the debtor’s creditors, such as Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and FTX-backed Alameda Research. Still, Voyager has already laid out a plan for what it intends to do with its customers’ assets.

Users who hold U.S. dollars (USD) on the platform will be able to recover it after a “reconciliation and fraud prevention process” is completed with Metropolitan Bank. However, users who own crypto on the platform will face a longer process. In a press release outlining the plan, Voyager explains:

“…customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized Company, and Voyager tokens. The plan contemplates an opportunity for customers to elect the proportion of common equity and crypto they will receive, subject to certain maximum thresholds.”

The company notes the crypto recovery plan must be approved by the court before it can be enacted. Furthermore, it’s clear Voyager does not have enough assets on hand to return crypto investments to customers. This is why it is choosing to provide them with equity in the newly reorganized company.

Voyager has stated it is continuing to evaluating all strategic alternatives to maximize stakeholder value.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

Read More:Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/07/voyager-digital-filed-for-chapter-11-bankruptcy-what-does-that-mean-for-crypto-customers/.

©2023 InvestorPlace Media, LLC