The cryptocurrency market has been volatile as of late, with many coins suffering significant losses over the past few months. Most recently, a report by Coindesk revealed that Voyager Digital had filed for bankruptcy protection through the US Bankruptcy Court Southern District of Florida. The news comes as another blow to the crypto industry after exchanges such as Voyager, Celcius, and potentially others file for bankruptcy over the next couple of months.
Unfortunately for me, I was not able to remove all of my crypto from Voyager before the ceased all trading on the exchange. I was focused on removing my funds off of the Coinbase exchange but was drawn to the percentage return I was receiving on my crypto from Voyager. I should have listened to my gut feeling and removed as much of my crypto from the exchange before July 2, 2022. Now, I am stuck with half my investment in the exchange and now in a wait and see mode through their bankruptcy hearings.
The digital bank Voyager Digital has filed for bankruptcy protection in the US and is set to be liquidated. The company was founded by Stephen Ehrlich, Philip Eytan, and Gaspard de Dreuzy. Voyager Digital, the parent of Voyager Exchange, is the latest in a long list of cryptocurrency exchanges to file bankruptcy. The exchange also faces multiple lawsuits from investors and others who are seeking reimbursement after losing money on the site.
This is not the first time that a digital currency exchange has been forced to file for bankruptcy protection due to regulatory or legal issues. Bitconnect, Bitstamp and Mt Gox are just some examples of other exchanges that have filed bankruptcies recently. Just recently, Mt Gox has received some bitcoin to return to prior investors but it still does not have enough to return to all the investors that lost their Bitcoin.
Voyager is a cryptocurrency exchange that provides a service similar to that of Coinbase or Robinhood. The exchange offers trading between Bitcoin, Ethereum, and other cryptocurrencies. Voyager also allows users to buy and sell Bitcoin using their debit card or bank account through an Automated Clearing House transfer for no fee at all.
According to a report by Coindesk, Voyager Digital has filed for Chapter 11 bankruptcy protection through the US Bankruptcy Court Southern District of New York. If you are not familiar with the term, Chapter 11 bankruptcy refers to a process in which US businesses can reorganize their debts and try to remain operational while doing so.
If you are not familiar with the term, Chapter 11 bankruptcy refers to a process in which US businesses can reorganize their debts and try to remain operational while doing so. The initial step of this process is filing for Chapter 11 bankruptcy protection—this essentially means that the debtor (in this case, Voyager Exchange Bank) is asking the court's permission to restructure its debt obligations while it continues operations.
Once granted by a judge, the company files with its creditors an official petition under section 11 of title 11 of United States Code (the code governing bankruptcy). That document lists all of Voyager's assets and liabilities as well as its proposed plan for repaying creditors over time. The cryptocurrency market is volatile and it is important for companies to remain flexible when entering this space. There are many examples of companies that have been flexible in the past.
Conclusion
With the number of cryptocurrency exchanges filing for bankruptcy increasing at an exponential rate, the future of this industry seems uncertain. However, there are many dedicated entrepreneurs who are willing to take risks and lead the way towards a more stable future. With risk comes both rewards and failures. Unfortunately, this may be a learning point I will have to eat for about half my portfolio. I would recommend the following. Keep all your crypto off exchanges and put it in a cold or hot wallet. I had a wallet but did not use it until recently when the market was getting too wonky. Knowing what I know now I have moved all but what was on Voyager to my wallet. Your passphrases your coins. Remember no one is looking out for you. Only you can look out and protect yourself and take the risk where you are willing to take it. It is no one else’s fault but my own. Tough pill to swallow but I get it now.
