It’s hard to avoid talking about these centralized cryptocurrency firms going bankrupt, because the dominos just keep falling. This time, Voyager Digital Holdings is the next one to topple over.
Voyager filed for Chapter 11 bankruptcy in a New York court on Tuesday according the the court documents. They estimate that Voyager has over 100,000 creditors and somewhere between 1 and 10 billion dollars in assets, as well as it reported about the same range in liabilities. All 3 registered companies under the Voyager blanket filed for bankruptcy, these include Voyager Digital Holdings, Inc., Voyager Digital, LLC and Voyager Digital Ltd.
According to the court documents, Voyager Digital, Ltd.’s creditors include Alameda Research Ventures LLC and Alameda Ventures Ltd., two companies associated with Sam Bankman-Fried, the founder of crypto exchange FTX. SBF been known to extend credit or otherwise bailout crypto companies in the past, so we will see what happens now that the official bankruptcy has been filed. Another big creditor of Voyager, according to the filing, is Google. The Chapter 11 filing protects Voyager from losing their assets, but basically sticks it to the creditors.
Voyager’s Stock Stops Trading On Toronto Exchange
Voyager is a Toronto based company with offices in New York where the filing was placed. The stock was trading in November 2021 around $20 per share, but due to the major correction in the crypto markets, the price of the stock has fallen below $1. At market close on Tuesday, the stock was trading at $0.27.
The Toronto Stock Exchange has halted trading of Voyager’s stock and is looking at a possible delisting from the exchange. This would essentially spell death for the already floundering crypto firm.
FDIC Denies Protection For Stablecoins
In Voyager’s marketing materials they stated that investor funds were secured by the FDIC. This practice was drawing allot of attention from regulators and industry observers alike and really put Voyager under allot of scrutiny over these claims.
The FDIC only protects funds that are held in regulated banks up to the amount of $250,000. It does not cover stablecoins. On top of that, the FDIC insurance only kicks in when there is a bank failure. In Voyager’s case, they are banked by Metropolitan Commercial Bank, which is not in any trouble of failure at this time, so there will certainly be no FDIC coverage for Voyager.
Self Custody Is The Best Custody
It’s yet just another shining example of Not Your Keys, Not Your Coins! These crypto firms are really only doing harm to themselves by abusing their leverage and putting investors’ money at risk. These are the kind of things that are putting bruises on the face of crypto, but bruises heal. Any left over scars will be a reminder of where we have come as an industry overall.
If you are wanting to lend out your crypto, do it using trusted decentralized protocols like Aave and Venus protocol, this way you are still in control of your funds. If we continue to try and replicate the same system that we are trying to escape from, then how much better are we? We have to be the change in the economy. These bankers and traditional investors coming in our space are like rats just following the cheese. They don’t care about the fundamentals of the technology or the fact that it is the way OUT of the system, they just want to squeeze ever last dollar out of anyone they can.
So protect your ASSets and keep your funds in a non custodial wallet, where YOU and ONLY YOU are in control over your keys! It’s time to take responsibility of your own money.
We just released a book that will help you keep your private keys safe and offline! You can pick it up here!
Nothing said is financial advise.
This is for educational and recreational purposes only!
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