Learn To Trade Forex • Best Forex Trading Course • AsiaForexMentor

  • Best Brokers
    • Choosing Brokers
    • Comparing Brokers
  • Best by Country
    • flags Best Forex Brokers in Taiwan
    • flagsBest Forex Brokers in Singapore
    • flagsBest Forex Brokers in South Africa
    • flagsBest Forex Brokers in Japan
    • flagsBest Forex Brokers in Philippines
    • flagsBest Forex Brokers in Malaysia
    • flagsBest Forex Brokers in Vietnam
    • flagsBest Forex Brokers in India
    • flagsBest Forex Brokers in Thailand
    • flagsBest Forex Brokers in South Korea
    • flagsBest Forex Brokers in China
    • flags Best Forex Brokers in Indonesia
    • flagsBest Forex Brokers in UAE
    • flagsBest Forex Brokers in Dubai
    • flagsBest Forex Brokers in Italy
    • flagsBest Forex Brokers in Spain
    • flagsBest Forex Brokers in UK
    • flagsBest Forex Brokers in US
    • flagsBest Forex Brokers in Australia
    • flagsBest Forex Brokers in Switzerland
  • Brokers Review
  • Ranking List
    • Popular Brokers
      • Pamm Forex Brokers
      • MT4 Forex Brokers
      • MT5 Forex Brokers
      • cTrader Forex Brokers
      • Commodity Brokers
    • By Regulation
      • FCA Regulated Forex Brokers
      • NFA Regulated Forex Brokers
      • NYSE Regulated Forex Brokers
      • ECN Regulated Forex Brokers
    • By Instruments
      • Gold Trading Brokers
      • Oil Trading Brokers
    • By Brokers Types
      • Stp Brokers
      • Market Makers
    • By Prop Trading Firm
    • By Trading Platforms
    • Top 10 Best Forex Brokers
  • Brokers
    • Choosing Brokers Categories
    • Compare Forex Brokers
  • Ranking List
    • Best Forex Brokers
    • Brokers by Country
      • US Forex Brokers
      • UK Forex Brokers
      • Australian Forex Brokers
      • Swiss Forex Brokers
    • Popular Brokers
      • Pamm Forex Brokers
      • MT4 Forex Brokers
      • Commodity Brokers
    • By Regulation
      • ECN Regulated Forex Brokers
      • NYSE Regulated Forex Brokers
      • NFA Regulated Forex Brokers
      • FCA Regulated Forex Brokers
    • By Instruments
      • Gold Trading Brokers
      • Oil Trading Brokers
      • Top 10 Best Forex Brokers
    • By Brokers Type
      • Stp Brokers
      • Market Makers
    • By Prop Trading Firm
    • By Trading Platform
  • Academy
    • Forex Guide
    • Trading Videos
    • Trading Strategies
    • AFM One Core Program
    • Trade Rescue Operation
    • Corporate Training & Advisory
  • Promotions
  • Awards
  • Newsletter
  • Best Brokers
    • Choosing Brokers
    • Comparing Brokers
  • Best by Country
    • flags Best Forex Brokers in Taiwan
    • flagsBest Forex Brokers in Singapore
    • flagsBest Forex Brokers in South Africa
    • flagsBest Forex Brokers in Japan
    • flagsBest Forex Brokers in Philippines
    • flagsBest Forex Brokers in Malaysia
    • flagsBest Forex Brokers in Vietnam
    • flagsBest Forex Brokers in India
    • flagsBest Forex Brokers in Thailand
    • flagsBest Forex Brokers in South Korea
    • flagsBest Forex Brokers in China
    • flags Best Forex Brokers in Indonesia
    • flagsBest Forex Brokers in UAE
    • flagsBest Forex Brokers in Dubai
    • flagsBest Forex Brokers in Italy
    • flagsBest Forex Brokers in Spain
    • flagsBest Forex Brokers in UK
    • flagsBest Forex Brokers in US
    • flagsBest Forex Brokers in Australia
    • flagsBest Forex Brokers in Switzerland
  • Brokers Review
  • Ranking List
    • Popular Brokers
      • Pamm Forex Brokers
      • MT4 Forex Brokers
      • MT5 Forex Brokers
      • cTrader Forex Brokers
      • Commodity Brokers
    • By Regulation
      • FCA Regulated Forex Brokers
      • NFA Regulated Forex Brokers
      • NYSE Regulated Forex Brokers
      • ECN Regulated Forex Brokers
    • By Instruments
      • Gold Trading Brokers
      • Oil Trading Brokers
    • By Brokers Types
      • Stp Brokers
      • Market Makers
    • By Prop Trading Firm
    • By Trading Platforms
    • Top 10 Best Forex Brokers
  • Brokers
    • Choosing Brokers Categories
    • Compare Forex Brokers
  • Ranking List
    • Best Forex Brokers
    • Brokers by Country
      • US Forex Brokers
      • UK Forex Brokers
      • Australian Forex Brokers
      • Swiss Forex Brokers
    • Popular Brokers
      • Pamm Forex Brokers
      • MT4 Forex Brokers
      • Commodity Brokers
    • By Regulation
      • ECN Regulated Forex Brokers
      • NYSE Regulated Forex Brokers
      • NFA Regulated Forex Brokers
      • FCA Regulated Forex Brokers
    • By Instruments
      • Gold Trading Brokers
      • Oil Trading Brokers
      • Top 10 Best Forex Brokers
    • By Brokers Type
      • Stp Brokers
      • Market Makers
    • By Prop Trading Firm
    • By Trading Platform
  • Academy
    • Forex Guide
    • Trading Videos
    • Trading Strategies
    • AFM One Core Program
    • Trade Rescue Operation
    • Corporate Training & Advisory
  • Promotions
  • Awards
  • Newsletter
AFM Proprietary Program
  • Best Brokers
    • Choosing Brokers
    • Comparing Brokers
    • Best CFD Brokers
    • Best ECN Brokers
    • Best MT5 Brokers
    • Best MT4 Brokers
    • Best cTrader Brokers
    • Best Spread Betting Brokers
    • Best PayPal Forex Brokers
    • High Leverage Forex Brokers
    • Best Zero Spread Brokers
    • Lowest Spread Forex Broker
    • Best Raw Spreads Brokers
    • Best TradingView Brokers
    • Best Forex Broker for Beginners
    • Best Forex Brokers for Scalping
    • Best Forex Options Brokers
    • PAMM Account Brokers
    • Best Bitcoin Forex Brokers
    • Best Cent Account Forex Brokers
    • Cheapest Forex Brokers
    • Best Commodities Brokers
  • Best by Country
    • flags Best Forex Brokers in Taiwan
    • flagsBest Forex Brokers in Singapore
    • flagsBest Forex Brokers in South Africa
    • flagsBest Forex Brokers in Japan
    • flagsBest Forex Brokers in Philippines
    • flagsBest Forex Brokers in Malaysia
    • flagsBest Forex Brokers in Vietnam
    • flagsBest Forex Brokers in India
    • flagsBest Forex Brokers in Thailand
    • flagsBest Forex Brokers in South Korea
    • flagsBest Forex Brokers in China
    • flags Best Forex Brokers in Indonesia
    • flagsBest Forex Brokers in UAE
    • flagsBest Forex Brokers in Dubai
    • flagsBest Forex Brokers in Italy
    • flagsBest Forex Brokers in Spain
    • flagsBest Forex Brokers in UK
    • flagsBest Forex Brokers in US
    • flagsBest Forex Brokers in Australia
    • flagsBest Forex Brokers in Switzerland
  • Brokers Review

    Forex Brokers

    • AvaTrade
    • Plus500 標誌 Plus500
    • FP Markets
    • TMGM
    • EXNESS
    • XM
    • JustMarkets
    • HTFX
    • Doo Prime
    • Markets4you

    Stock Brokers

    • XM
    • Interactive Brokers
    • Orbex
    • RoboForex

    Crypto Exchanges

    • Binance
    • Coinbase
    • Gemini Exchange
    • Kraken

    Prop Firms

    • iFunds
    • IC Funded
    • The 5ers Logo (2)-svg The 5%ers
    • TopStep

    Binary Brokers

    • IQ Option
    • Pocket Option
    • RaceOption
    • IQCent
  • Ranking List
    • Popular Brokers
      • Pamm Forex Brokers
      • MT4 Forex Brokers
      • MT5 Forex Brokers
      • cTrader Forex Brokers
      • Commodity Brokers
    • By Regulation
      • FCA Regulated Forex Brokers
      • NFA Regulated Forex Brokers
      • NYSE Regulated Forex Brokers
      • ECN Regulated Forex Brokers
    • By Instruments
      • Gold Trading Brokers
      • Oil Trading Brokers
    • By Brokers Types
      • Stp Brokers
      • Market Makers
    • By Prop Trading Firm
    • By Trading Platforms
    • Top 10 Best Forex Brokers
  • Brokers
    • Choosing Brokers Categories
    • Compare Forex Brokers
  • Ranking List
    • Best Forex Brokers
    • Brokers by Country
      • US Forex Brokers
      • UK Forex Brokers
      • Australian Forex Brokers
      • Swiss Forex Brokers
    • Popular Brokers
      • Pamm Forex Brokers
      • MT4 Forex Brokers
      • Commodity Brokers
    • By Regulation
      • ECN Regulated Forex Brokers
      • NYSE Regulated Forex Brokers
      • NFA Regulated Forex Brokers
      • FCA Regulated Forex Brokers
    • By Instruments
      • Gold Trading Brokers
      • Oil Trading Brokers
      • Top 10 Best Forex Brokers
    • By Brokers Type
      • Stp Brokers
      • Market Makers
    • By Prop Trading Firm
    • By Trading Platform
  • Academy
    • Forex Guide
    • Trading Videos
    • Trading Strategies
    • AFM One Core Program
    • Trade Rescue Operation
    • Corporate Training & Advisory
  • Promotions
  • Awards
  • Newsletter
AFM Proprietary Program

Voyager Crypto: The First Bankrupt Multi-Billion Dollar Crypto Lender

Written by

Ezekiel Chew

Updated on

January 29, 2025

i
January 29, 2025 3:52 pm No Comments

Voyager Digital Assets Inc. (Voyager) has made history as the first multi-billion dollar crypto broker and lender to file for bankruptcy protection and reorganization under Chapter 11 and asset protection for its Canadian subsidiary under Chapter 15. It filed for bankruptcy in 2022 after it failed to garner enough investment from outside investors to save itself from bankruptcy. In the aftermath of its filing, its unsecured account holders have become unsecured creditors who are last in line to have their claims addressed by the bankruptcy court in the Southern District of New York.

Also Read: Blockfi vs Coinbase

Contents

  • What is Voyager?
  • Voyager Filed for Bankruptcy
  • Voyager Accused of Misrepresentation: Retail Customers Mourning Their Loss Of Funds
  • The Voyager Saga: The Rise & Fall of Voyager Digital
  • Key Takeaways
  • FAQs

What is Voyager?

Voyager offered the market three types of services: brokerage, custodial, and lending. It used its retail and institutional customers’ assets to make high risk, unsecured loans at exorbitant interest rates. The exorbitant interest rates generated a nice profit for Voyager and high interest rates for each Voyager customer. The Voyager app could be downloaded to a mobile phone or laptop computer.

At its peak, Voyager had 3.5 million customers and US$5.9 billion in assets. It was financially equivalent to a small regional bank or well-established wealth management firm. Although based in the USA, Voyager was listed on the Toronto Stock Exchange.

Back to Top

Voyager Filed for Bankruptcy

bankruptcy
Photo credit: thebluediamondgallery.com

The combination of one of Voyager's main borrowers, Three Arrows Capital (3AC), loan default and bankruptcy filing and the rapid decline in value of its crypto assets during the crypto winter led to Voyager being in a fragile financial condition. The term “crypto winter” refers to the crypto bear market that slowly built up momentum from the fourth quarter of 2021 and continued into the second quarter of 2022.

Its death spiral started when voyager account holders became spooked by the plummeting market prices of crypto assets and tried to withdraw their funds from the Voyager platform in large numbers. The ‘run on the bank' forced Voyager to suspend the accounts of its depositors.

While the accounts were suspended, it tried to strengthen its operations and replace the funds lost to 3AC's loan default and the value of its assets that were in sharp decline as more and more crypto exchanges and lenders went bankrupt or became financially stressed.

When Voyager was unable to find an investor who could provide enough money to salvage its operation, it filed for Chapter 11 bankruptcy in the USA and its Canadian subsidiary filed for Chapter 15 asset protection in the USA.

Voyager was forced to turn the bailout process over to the bankruptcy court in the Southern District New York (SDNY). SDNY has confirmed that it has received and vetted offers from over 22 firms interested in purchasing Voyager. If the bankruptcy court cannot select the best applicant for the takeover of Voyager, the firm will be auctioned off to the highest bidder at the end of September 2022.

Back to Top

Voyager Accused of Misrepresentation: Retail Customers Mourning Their Loss Of Funds

Voyager retail investors claim that they were misled by Voyager's terms. They assert that the statement made by Voyager led them to believe that the Metropolitan Commercial Bank (MCB) guaranteed their deposits with Voyager. That was not remotely true.

Material Misrepresentation of Voyagers Operations

Voyager is being accused of materially misrepresenting its operations to its customers. In its public documents, Voyager’s stated that its assets were held in the Metropolitan Commercial Bank and that those deposits were insured by the Federal Deposit Insurance Corporation (FDIC). Its retail investors interpreted its disclosures to mean that their individual crypto assets and fiat accounts were insured by eh FDIC.

The FDIC had never insured Voyager’s crypto assets, because it does not insure crypto assets. However, it did insure Voyager's fiat currency accounts at MCB. The retail investors accounts were never insured by the FDIC.

Voyager's Unsecured Creditors

Since its bankruptcy filing, Voyager's account holders have learned that the bankruptcy court considers them to be unsecured creditors. Retail account holders are the last in line to recover assets from Voyager. They must wait until after the sophisticated secured creditors, experienced bankruptcy lawyers, and well-heeled corporate attorneys have wrangled the best settlements possible from the bankruptcy court.

Back to Top

The Voyager Saga: The Rise & Fall of Voyager Digital

The Rise to Glory

Voyager gained prominence in 2019 when investors were looking for ways to increase the interest received on their investments. The bull market had led to low interest rates on government bonds, certificates of deposit, and treasury bonds. In addition, there was very little money to be made from investing in corporate debt because loan rates were abysmally low.

Voyager and crypto firms like it provided mouth-watering investment opportunities by promising their investors 12% return on investment if they placed their assets crypto and fiat under the care of the crypto firm.

Voyager was able to promise shockingly high rates of return because it was making high risk, unsecured loans to crypto firms. The borrowers were paying loan interest rates as high as 35%. The loans were short-term and heavily supported by crypto assets.

In short, Voyager collected funds from its retail and institutional investors. It then loaned those funds to other firms at exorbitant interest rates. The firms went to Voyager because they were asking for funds that no established, reputable bank would loan them. The exorbitant interest rates were worth it if the firms were able to close the lucrative high value deals.

The Crypto Winter: 2021 – 2022

crypto winter
Photo credit: flickr.com

This unregulated, profitable business arrangement blossomed while the crypto market was doing well. However, when the market turned and crypto markets began to steadily decline in value, this business arrangement began to fail.

The crypto winter, November 2021 to June 2022, was the perfect storm to dethrone high-flying crypto lending firms. Besides the crypto prices declining by 33%, there was rising inflation, the war between the Ukraine and Russia, and interest rate hikes by the Federal Reserve. This perfect storm caused crypto borrowing firms to default on their loans. They were unable to make their loan interest payments, secure their own digital assets, or return the initial borrowed capital.

Also Read: Crypto Heat Map: Advantages and Disadvantages

Terraform Labs Sudden Death

terraform
Photo credit: commons.wikimedia.org

Terraform Labs issued TerraUSD, a stablecoin, and Luna, a cryptocurrency. Luna was valued in TerraUSD. 1 Luna was equal to 1 TerraUSD. The TerraUSD was pegged to the U.S. dollar, with 1 TerraUSD equal to US$1.00.

In May 2022, more than US$2 billion worth of TerraUSD was sold. The selling off of such a large amount of TerraUSD led to a panic amongst its investors. As they rushed to dump TerraUSD, its market price dropped from US$1.00 to US$0.15, and Luna plummeted from US$1.00 to US$0.01.

Three Arrows Capital: Voyager's Achilles Heel

liquidation
Photo credit: thebluediamondgallery.com

Three Arrows Capital (3AC), a hedge fund, was heavily invested in Luna. It held more than US$200 million in Luna tokens. When Luna lost value, 3AC's Luna assets became worthless. 3AC began its liquidation proceedings in the British Virgin Islands in late June 2022. At the time of its liquidation, 3AC was worth US$5million.

3AC's rapid liquidation caused Voyager to become insolvent. Voyager had loaned 3AC US$350 million and 15,250 Bitcoin. In total, the loan was worth more than US$650 million. Voyager had to immediately decide whether to liquidate all its assets or raise capital. It chose to raise capital. To do that, it suspended activity on its retail and institutional accounts.

Voyager’s Restructuring Plan

Voyager wants to use a dual track restructuring program that will either sell the company or result in issuance of equity in the reorganized company to its customers. Currently, Voyager's reorganization plan includes issuing (1) cash, (2) tokens, (3) the Voyager token, (4) 3AC recovery assets, and (5) new common stock in the reorganized company.

Back to Top

Key Takeaways

Many Voyager customers have belatedly realized that their crypto assets are not FDIC insured and there is no government protection of their digital assets like there is for bank deposits at American banks.

That ‘old' adage, never invest more in crypto than you can afford to lose without regret, is still true and should be adhered to by crypto investors.

Back to Top

FAQs

Did other crypto firms go bankrupt during the crypto winter?

Yes, several crypto firms filed for bankruptcy during the crypto winter. The firms that filed for bankruptcy by July 2022 include Celsius Network, Babel Finance, Voyager Digital, Three Arrows Capital, and TerraForm Labs.

Does the voyager token still have value?

Yes, the Voyager token still has value. Since Voyager filed for bankruptcy, the Voyager token's value has increased 40%. However, there is no guarantee that the Voyager token will appreciate in value after Voyager completes its bankruptcy proceedings.

Back to Top

 

« Previous
Next »
Leave a Reply

Click here to cancel reply.

GET THE PROPRIETARY ONE CORE PROGRAM
The same system I use to make 6 figures a trade with

5 PART SYSTEM TO MAKE REALLY BIG MONEY IN TRADING

FREE TRAINING

We have generated over millions of dollars via trading with the 5 part system outlined in this free training. Download it now before this page comes down or when I decide to stop mentoring.
 

Services

  • AFM One Core Program
  • Corporate Forex Training
  • Trade Rescue
  • Speak At Your Event
  • AFM One Core Program
  • Corporate Forex Training
  • Trade Rescue
  • Speak At Your Event

Resources

  • Forex Trading Strategies
  • Forex Blog
  • Forex Vlog
  • Download Trading Platform
  • Forex Position Size Calculator
  • Forex Brokers Review & Rating
  • Forex Trading Strategies
  • Forex Blog
  • Forex Vlog
  • Download Trading Platform
  • Forex Position Size Calculator
  • Forex Brokers Review & Rating

Company

  • Who is Asia Forex Mentor
  • Asia Forex Mentor Reviews
  • Contact Us
  • Affiliate Program
  • Advertise with us
  • Best Crypto Broker
  • Broker Awards – Asia Forex Mentor
  • test2323
  • Who is Asia Forex Mentor
  • Asia Forex Mentor Reviews
  • Contact Us
  • Affiliate Program
  • Advertise with us
  • Best Crypto Broker
  • Broker Awards – Asia Forex Mentor
  • test2323

Address

6 Raffles Boulevard, #03-308,
Singapore 039594

Whatsapp Text: +65 8786 8319

Disclaimer: Any Advice or information on this website is General Advice Only – It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by ECG Pte Ltd, it’s employees, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures, spot forex, cfd’s, options or other financial products. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
High Risk Warning: Forex, Futures, Stocks, Indexes, Commodities, Crypto and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.

AFM

#1 FOREX MENTOR IN ASIA

©2025 ASIA FOREX MENTOR. All Rights Reserved.

| Disclaimer – Terms of Use | Privacy Policy | Cookie Policy | Privacy Policy – Europe GDPR

English | Français | Deutsch

Facebook-f Youtube Instagram Tiktok Linkedin

Get Ezekiel Chew’s 5 Day Email Course on “How to be in the Top 10% league of Forex Traders”

100% Free – Delivered to your inbox

Subscribe to the most popular Forex Trading  blog online, join thousands of readers






Get Ezekiel Chew’s 5 Day Email Course on “How to be in the Top 10% league of Forex Traders”

100% Free – Delivered to your inbox

Subscribe to the most popular Forex Trading  blog online, join thousands of readers






I consent to receiving emails and/or text message reminders for this event.

REGISTER FOR THE MASTERCLASS!

I consent to receiving emails and/or text message reminders for this event.

REGISTER FOR THE MASTERCLASS!


Scroll to top

I consent to receiving emails and/or text message reminders for this event.

REGISTER FOR THE MASTERCLASS!