The cryptocurrency crisis does not stop. The contagion has also hit Voyager Digital, the latest victim of the sharp price drop rocking the digital asset market. The cryptocurrency lender announced Tuesday that it has filed for bankruptcy protection less than a week after it frozen withdrawals on its platform. In a document filed with New York bankruptcy court, the company claims to have more than 100,000 creditors. The estimated value of Voyager’s assets ranges between $1 billion and $10 billion.
The Voyager crash occurred less than a week after trading and withdrawals were suspended. What a real snowball effect it had: the bankruptcy of the heavily indebted Three Arrows Capital fund of the stock exchange dragged Voyager Digital with it. Voyager has lent $650 million in cryptocurrency to Three Arrows Capital. The Toronto-listed company has seen its stock value drop nearly 98% since early 2022.
There is pressure coming
The crypto crisis began in May when the values of TerraUSD (UST) and its associated token Luna tumbled, wiping out at least $55 billion in value and putting the futures of several major companies at risk. Celsius also had to announce a ban on pullouts in June. The collapse of the cryptocurrency markets has made regulation even more urgent for the sector. The European Union is working on a regulatory framework for crypto assets with the goal of introducing it by 2024, while Joe Biden in the United States has signed an executive order authorizing the federal government to coordinate a regulatory plan for cryptocurrencies. According to the Federal Trade Commission, since the beginning of 2021, 46,000 people in the United States have lost more than $1 billion to cryptocurrency fraud.