Cryptocurrency broker Voyager Digital files for bankruptcy

Cryptocurrency broker Voyager Digital filed for bankruptcy Wednesday amid turmoil in the crypto market.

The New York-based company said it commenced a voluntary Chapter 11 process while its main operating subsidiaries filed voluntary petitions for reorganization in the US Bankruptcy Court in the Southern District of New York.

"This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers," CEO Stephen Ehrlich said in a statement.

"While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital on a loan from the Company's subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now," he said.

Voyager Digital said it has more than $110 million in cash and owned crypto assets on hand, in addition to over $350 million in cash in a commercial bank.

The company said it also has approximately $1.3 billion of crypto assets on its platform, plus claims against Three Arrows Capital of more than $650 million.

Cryptocurrency hedge fund Three Arrows Capital filed for Chapter 15 bankruptcy on June 2 to protect its assets from creditors, after defaulting on Voyager Digital's loan on June 27 worth more than $670 million.

The crypto market has been in turmoil since mid-June amid the collapse of the controversial stablecoin UST.

Crypto loan firm Celsius Network paused all withdrawals, swaps and transfers June 13 between user accounts due to extreme market conditions.

Cryptocurrency lender Vauld paused all trading, withdrawals, and deposits Monday on its platform. Nexo, another crypto lender, announced Tuesday that it has made an offer to buy Vauld.