Cryptocurrency lending platform Voyager Digital filed for bankruptcy protection Wednesday as the hedge fund faced serious financial difficulties following the events of Three Arrows Capital.
According to court documents, the creditor filed for bankruptcy under Chapter 11 in the Southern District of New York.
The company has over $1 billion in estimated assets and more than 100,000 creditors. The move comes shortly after withdrawals were suspended on the cryptocurrency lending platform.
Voyage has also been heavily influenced by Three Arrows Capital, which is negotiating bankruptcy. Three Arrows had recently failed on a $660 million; loan from Voyager, which likely pushed the lender’s last deposit to its limit.
Bitcoin and Ethereum prices plummeted in the response to Voyager’s request for bankruptcy, with BTC dipping below $20,000. The deposits could put more pressure on the cryptocurrency markets, as most of Voyager’s assets will likely be liquidated to pay off its debtors.
Currently, it appears to be Voyager’s biggest lender after it placed a $500 million line of credit on the cryptocurrency lending platform. Voyager pulled about $75 million from here. The bankruptcy could also pressure Almaeda’s finance, which could have an avalanche effect on the cryptocurrency market.