San Francisco, July 6 , 2022: Top cryptocurrency broker Voyager Digital on Wednesday filed for bankruptcy in the US, after top crypto hedge fund Three Arrows Capital (3AC) did the same last week, in which Voyager has made significant investments which the company is yet to get back.

It had significant investments in Singapore-based hedge fund 3AC, which failed to make payments on a loan of 15,250 Bitcoins and $350 million USDCs — that makes the loan worth more than $650 million.

“This comprehensive reorganisation is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,” said Stephen Ehrlich, CEO of Voyager.

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, require us to take deliberate and decisive action now,” he said in a statement.

Earlier this week, Voyager suspended all trading, deposits, withdrawals and loyalty rewards on its platform.

Voyager has approximately $1.3 bn of crypto assets on the platform and more than $350 million of cash for customers.

The proposed plan of reorganisation “contemplates an opportunity for customers to elect the proportion of common equity and crypto they will receive, subject to certain maximum thresholds”, said the company.

The company said it has over $110 million of cash and owned crypto assets on hand, which will provide liquidity to support day-to-day operations.

Voyager said it was actively pursuing all available remedies for recovery from 3AC.

The development came as popular crypto tokens such as Bitcoin and Ethereum nosedived by nearly 70 per cent from their record highs amid the economic meltdown.

The Monetary Authority of Singapore last week slammed Three Arrows for providing false information and breaching an asset under management threshold.

The mega fund, founded by Credit Suisse traders Zhu Su and Kyle Davies, once managed an estimated $10 billion in assets.