Judge Allows Voyager to Pay Off Credit Card Debt
The judge approved the notion “with great misgivings” and chastised the company for not seeking alternative sources of credit.
- Crypto exchange company Voyager Digital was accorded permission to pay off $76,000 across 24 credit cards to Brex.
- The bankruptcy judge, who gave his approval reluctantly, said the company had not sought out credit from other card providers; nor had it made a strong case as to why it even needed credit cards in the first place.
- Voyager is currently going through Chapter 11 bankruptcy proceedings following a liquidity crisis that was sparked by crypto hedge fund Three Arrows Capital’s collapse last month.
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Crypto exchange Voyager will be able to pay off $76,000 of credit card debt to Brex, a judge reluctantly decided yesterday.
“Great Misgivings” Over Voyager
Voyager Digital will be paying off some of its credit card debt.
The crypto exchange received permission “with great misgivings” from bankruptcy Judge Michael E. Wiles yesterday to pay off $76,000 of credit card debt to Brex, a business focused on providing credit card services to tech companies.
The approval was given reluctantly, as Judge Wiles questioned why the company had not first sought out credit from other providers. “All I have are vague and generalized descriptions of why you need credit cards generally,” said the Judge. “Not why you need these particular cards or need to pay these amounts.”
Voyager’s legal team argued that the company already had a relationship with Brex and that the exchange would be able to keep using the 24 credit cards once the $76,000 debt was paid. Other card providers may hesitate to provide the exchange credit considering the ongoing bankruptcy proceedings; switching to another card provider would also create further delays.
Voyager suspended trading, deposits and withdrawals on its platform following the collapse of crypto hedge fund Three Arrows Capital (3AC) last month. The exchange was exposed to the former multi-billion dollar establishment to the amount of $350 million and 15,250 BTC, for a total of around $710 million at today’s prices.
The company recently filed for Chapter 11 Bankruptcy to meet its obligations to creditors and investors. It claims to have roughly $110 million in cash and digital assets at hand, $1.3 billion in cryptocurrencies on the platform, $350 million in cash in an account at the Metropolitan Commercial Bank, and its claims against 3AC. The company has indicated plans to return account balances to its customers.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.