Crypto lender Voyager Digital is the latest domino to fall in the tumultuous market for digital assets.

Voyager Digital disclosed on Wednesday that it filed for bankruptcy on Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

The bankruptcy petition comes a week after the company froze withdrawals, trading, and deposits as it sought further time to consider available options. Since the beginning of 2022, Voyager’s shares have lost over 98 percent of their value.

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According to the filing, Voyager’s estimated assets are between $1 billion and $10 billion, and its liabilities fall within the same spectrum. The Toronto, Canada-based digital currency lender has more than 100,000 creditors.

Chapter 11 bankruptcy proceedings halt all civil action and permit companies to continue operations while preparing turnaround strategies.

Stephen Ehrlich, chief executive officer of Voyager, stated:

Three Arrows, one of the most prominent investors affected by the rapid sell-off in crypto markets, is being liquidated, according to a report from Reuters last week, citing a source with knowledge of the situation.

Since its November 2017 peak of $3 trillion, the cryptocurrency market has fallen to less than $1 trillion, with the loss intensifying in May after the collapse of Terra, a multibillion-dollar cryptocurrency.

Crypto total market cap at $881 billion on the daily chart | Source: TradingView.com

In response to Voyager’s filing, Bitcoin and Ethereum prices declined, with BTC slipping below $20,000. As a significant portion of Voyager’s assets are now expected to be liquidated to satisfy its debts, the move is anticipated to increase market pressure.

Alameda Research, the quant trading firm of billionaire Sam Bankman-Fried, offered Voyager a credit line of $500 million in cash and cryptocurrencies last month in a vain effort to help the company through its difficult period.

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Alameda was identified as Voyager’s top creditor on Tuesday’s bankruptcy filing, with a $75 million claim.

This avalanche of bankruptcies coincides with crypto markets’ almost 60 percent decrease in value this year. This exposed a number of overleveraged companies to margin calls, which they failed to fulfill because of the decline in cryptocurrency values.

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