Voyager Digital’s (VYGVF) – Get the Voyager Digital Ltd report The CEO sold shares of the cryptocurrency platform and lender near its maximum trading price and a year and a half before the company was subject to bankruptcy proceedings, according to a report by the media.
Voyager CEO Steven Ehrlich cashed in on the shares in February and March 2021. The lender filed for bankruptcy in July 2022, CNBC reported, citing the Canadian Securities Administration.
Shares of Voyager skyrocketed from 7 cents per share in October 2020 to $26 per share in March 2021. Bitcoin soared 455% and Ether jumped 688% over the same period.
Crypto’s all-time highs, set in November, crashed this summer, wiping out $2 trillion from the cryptocurrency market.
Sale of shares
The CEO and related Delaware LLCs sold nearly 1.9 million shares in 11 sales totaling $31 million from Feb. 9 to March 31, 2021, according to data from the Canadian Securities and Exchange Commission securities.
The three largest deals brought in nearly $19 million from the sale of 1.4 million shares. The sales were tied to a $50 million secondary offering by Stifel Nicolaus in February 2021, the website reported.
Shares of Voyager Digital peaked at nearly $30 a week after Ehrlich’s last sell-off.
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In July 2022, Voyager would file for bankruptcy after freezing the assets of its customers.
Lending activities led to the fall
As a crypto-trading platform, Voyager has also provided loans and staking services, which are a type of reward for holding certain digital coins.
The company’s lending activity led to its downfall: Voyager appears to have loaned its clients’ funds to crypto hedge fund Three Arrows Capital, also known as 3AC.
3AC defaulted in June on a $667 million loan granted to it by Voyager. Three Arrows Capital has been forced by a court in the British Virgin Islands to enter into liquidation.
This decision led Voyager to suspend deposits, withdrawals and loyalty rewards on its platform.
“Customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common stock of the newly reorganized company and Voyager tokens,” Ehrlich wrote on Twitter. July 6.
In its bankruptcy filing, Voyager said it had custody of $1.3 billion in customer crypto assets among its 3.5 million active users.
Voyager had promised massive returns on digital assets, but was unable to maintain operations during huge losses in the crypto market.
The FDIC then ordered Voyager to stop calling its products FDIC-insured, calling the claims “false and misleading.” Bank deposits are FDIC insured, unlike stocks and alternative assets.