Key points to remember
- Crypto exchange firm Voyager Digital has been authorized to refund $76,000 across 24 credit cards at Brex.
- The bankruptcy judge, who reluctantly gave his approval, said the company had not sought credit from other card providers; nor had he explained why he even needed credit cards in the first place.
- Voyager is currently in Chapter 11 bankruptcy proceedings following a liquidity crisis triggered by the collapse of crypto hedge fund Three Arrows Capital last month.
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Crypto exchange Voyager will be able to pay off $76,000 in credit card debt in Brex, a judge reluctantly ruled yesterday.
“Great Concerns” on Voyager
Voyager Digital will repay a portion of its credit card debt.
The crypto exchange yesterday received permission “with great trepidation” from bankruptcy judge Michael E. Wiles to pay off $76,000 in credit card debt to Brex, a company focused on providing card services credit to technology companies.
The approval was given reluctantly, as Judge Wiles questioned why the company had not first sought credit from other suppliers. “All I have are vague and generalized descriptions of why you need credit cards in general,” Judge said. “Not why you need those particular cards or have to pay those amounts.”
Voyager’s legal team argued that the company already had a relationship with Brex and that the exchange could continue to use all 24 credit cards after the $76,000 debt is paid off. Other card providers may be reluctant to provide trade-in credit given ongoing bankruptcy proceedings; switching to another card provider would also cause additional delays.
Voyager has suspended transactions, deposits and withdrawals on its platform following the collapse of crypto hedge fund Three Arrows Capital (3AC) last month. The exchange was exposed at the former multi-billion dollar facility for $350 million and 15,250 BTC, for a total of approximately $710 million at today’s prices.
The company recently deposit for Chapter 11 Bankruptcy to fulfill its obligations to creditors and investors. He claims to have approximately $110 million in cash and digital assets on hand, $1.3 billion in cryptocurrencies on the platform, $350 million in cash in an account at Metropolitan Commercial Bank and its claims against 3AC. The company has noted plans to return account balances to its customers.
Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.