Court Confiscates Three Arrows’ Assets, VGX Gains 573%

Crypto lender Voyager Digital’s native token, VGX embarked on a remarkable rebound after the 3AC court verdict. While this might be an odd coincidence, this makes for a surprising turn of events, given both platforms’ shared troubles over the past few weeks. 

The Voyager-3AC History

Like several DeFi platforms in recent times, Voyager has encountered its share of financial challenges amidst the failing market. Just last week, the platform filed for Chapter 11 bankruptcy at a court in New York. Notably, this came days after they announced that they were putting withdrawals on hold, again mirroring other firms.

Voyager’s problems go back to late June, when the company first issued a notice of default to crypto hedge fund Three Arrows Capital(3AC). This move followed 3AC’s failure to make payments for a loan of over $700M. The exposure comprised roughly 15,250 Bitcoins and 350 million USDC tokens.

3AC’s failed payments paired with the general crypto decline were considerable factors behind Voyager’s petition for bankruptcy. CEO Stephen Ehrlich was far from hesitant to make this claim. Ehrlich stated the Three Arrows Capital loan had pushed Voyager to sign the Chapter 11 petition.

$VGX Surge After Court Seizes 3AC Assets

Voyager Digital manages between $1 billion and $10 billion worth of cryptocurrency assets. The firm claims to have over 100,000 creditors. However, despite being under threat of bankruptcy, the Voyager token charted gains scaling 573% over the past 24 hours. VGX climbed from $0.15 to record a high of $1.01 earlier today; the token rests at $0.71 at writing. 

The uptrend began shortly after the news broke of an order from a New York-based federal judge. Martin Glenn approved a motion to seize Three Arrows’ assets after the company’s co-creators Zhu Su and Kyle Davies disappeared. Supposedly, the pair went into hiding to escape furious creditors trying to recover their funds.

Contrastingly, three Arrows Capital has been in operation for almost a decade. Just over a month ago, the company sat on assets worth about 10 Billion USD. Glenn’s ruling allows for subpoena service to the 3AC founders as well as businesses and institutions they have worked with.

While news of the court order and the favorable price activity arrived a few hours apart, they are not necessarily connected. One plausible reason for the surge could be Voyager’s attempts to restructure its capital. The platform is reacquiring tokens in bulk to create liquidity for customers.

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In addition to this, there is also talk of a likely acquisition. If the speculations are correct, this could provide the platform liquidity and kick up the token’s price.

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