Voyager’s filing comes within days of a similar action by Three Arrows Capital under Chapter 15 of the US Bankruptcy Code.

Crypto broker Voyager Digital (TSE: VOYG) filed for bankruptcy protection under Chapter 11 on Tuesday, according to an announcement by the company. The move follows after a bankruptcy filing by Three Arrows Capital, a crypto hedge fund that owes Voyager more than $650 million in loans. Voyager had previously halted withdrawals, trading, and deposits from customers following a default by Three Arrows Capital on loan repayment.

“Contagion” in the crypto market

Voyager Digital filed its bankruptcy petition in the U.S. Bankruptcy Court of the Southern District of New York.

Stephen Ehrlich, Chief Executive Officer of Voyager, said in a statement: “Voyager’s platform was built to empower investors by providing access to crypto asset trading with simplicity, speed, liquidity, and transparency. 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.”

The company said it had approximately $1.3 billion of crypto assets on the platform, more than $350 million of cash held in the FBO Account for customers at Metropolitan Commercial Bank, and claims against Three Arrows Capital of more than $650 million.

Based on a proposed restructuring, customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized company, and Voyager tokens.

The company said it was actively pursuing all available remedies for recovery from 3AC, including through the court-supervised processes in the British Virgin Islands and New York.

A court in the British Virgin Islands ordered Three Arrows Capital into liquidation on June 27, the same day that Voyager issued a notice of default to the hedge fund.

Voyager customers with USD deposits in their account(s) will receive access to those funds after a reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank.

Related Story: After Liquidation Order In The British Virgin Islands, Three Arrows Files For US Bankruptcy