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Crypto crash: Bitcoin price sinks further as Voyager Digital files for bankruptcy

·2-min read
Crypto lender Voyager Digital filed for bankruptcy on 5 July, 2022 (Getty Images)
Crypto lender Voyager Digital filed for bankruptcy on 5 July, 2022 (Getty Images)

The price of bitcoin has fallen once again on Wednesday after Voyager Digital became the latest high-profile crypto firm to file for bankruptcy.

The Canada-based cryptocurrency lender announced on Wednesday that it has commenced a voluntary Chapter 11 process in order to “maximize value of all stakeholders”.

The filing with the Southern District of New York estimated that Voyager Digital has more than 100,000 creditors and up to $10 billion in assets.

“Today we began a voluntary financial restructuring process to protect assets on the platform, maximize value for all stakeholders, especially customers, and emerge as a stronger company,” Voyager Digital CEO Stephen Ehrlich tweeted.

“During the reorganisation, we’ll maintain operations. We intend to certain customer programs without disruption. Trading, deposits, withdrawals and loyalty rewards on the Voyager platform remain temporarily suspended.”

It comes just days after the company suspended trading, deposits, loyalty rewards and withdrawals amid a liquidity crisis across the crypto industry.

Celsius, CoinLoan and CoinFlex are among the companies to have also announced restrictions or halts on customer withdawals over the last month.

Voyager Digital’s token, VGX, was trading at $0.21 on Wednesday morning, down from a peak above $5 in November 2021.

During that seven-month period, the overall crypto market has fallen from close to $3 trillion to below $1 trillion.

Bitcoin, the world’s most valuable cryptocurrency, briefly fell below $20,000 following Voyager Digital’s announcement, as it continues to struggle to recover from one of the worst price crashes in its history.

Some crypto experts believe a recent run of relative stability amid the market turmoil could suggest that a bottom has been reached, with analysts at the Bitfinex excahange telling The Independent that it could imply “that an intrinsic value has been realised” for the cryptocurrency.

Others fear there may be one final “washout” before any significant recovery is seen.

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