Embattled Crypto broker Voyager Digital files for Chapter 11 bankruptcy

On heels of last week’s suspension of deposits and withdrawals, Voyager Digital (OTCQX:VYGVF) has filed for Chapter 11 bankruptcy.In an announcement, the firm stated that it has around $1.3 billion in crypto assets, and more than $350 million in cash held in the FBO (For Benefit Of) account for customers at Metropolitan Commercial Bank.As part of the reorganization process, Voyager will file customary "First Day" motions to allow it to maintain operations.The firm is seeking protection for three divisions, Voyager Digital Holdings, Voyager Digital LLC, and Voyager Digital, Ltd.It added that customers holding USD will receive access to their funds "after a reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank."CEO Stephen Ehrlich, said: "This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers. He added that the Chapter 11 process "provides an efficient and equitable mechanism to maximize recovery."The proposed Plan of Reorganization would resume account access and return value to customers, but it would require court approval.Earlier on Tuesday, Voyager Digital downgraded to Neutral at H.C. Wainwright on liquidity concerns.