In the turbulent world of crypto, even well-established players face hard times. Voyager Digital, a once-thriving cryptocurrency brokerage, now facing bankruptcy, is set to pay over $1 million for legal services provided in April.
Voyager Digital’s struggle illuminates the challenging climate for crypto firms amid market volatility, leading to the eventual bankruptcy of the company. This unfortunate turn of events has led Voyager Digital to rely heavily on the expertise of Kirkland & Ellis, its legal advisor, to navigate through its bankruptcy process.
However, Kirkland & Ellis’s aid comes at a steep cost, as Voyager Digital is expected to spend approximately $1.1 million on fees and expenses incurred by the law firm in April.
Escalating Costs Amid Bankruptcy
Documents indicate a significant cost associated with the legal aid provided by Kirkland & Ellis. The law firm applied a blended hourly billing rate of $1,313.18 for all services rendered during April.
The cumulative charges for attorneys and paralegals exceeded $1.4 million. The document also reveals that some of the top professionals at the firm levied an hourly rate surpassing $2,000.
Kirkland & Ellis is no stranger to clients in the crypto space. The firm has represented several crypto companies that have declared bankruptcy such as crypto lenders BlockFi and Celcius.
Voyager Digital’s Struggle And The Broader Picture
Amid the wake of significant setbacks from the cryptocurrency credit debacle, Voyager Digital took the severe step of seeking Chapter 11 bankruptcy protection last July. This financial crisis left a widespread impact on a host of lenders and brokers in the sector.
The corporation, previously under the leadership of Steve Ehrlich, a former executive at E*Trade, was listed on the Canadian public market. At the time it filed for bankruptcy, Voyager Digital disclosed outstanding obligations estimated to be between $1 billion and $10 billion.
However, nearly a year after filing for bankruptcy, the crypto lender announced in May that as the company proceeds with its termination process following an unsuccessful takeover bid by Binance.US, clients can expect to reclaim approximately 35% of their digital currency deposits.
Furthermore, Voyager Digital’s case serves as a stark reminder of the volatile nature of the crypto market and the importance of regulatory compliance and risk management strategies for companies operating in this space.
As the crypto landscape continues to evolve, companies and investors alike will be keen to learn from cases such as these, using them as a guide to navigating the still largely uncharted waters of the crypto economy.
Meanwhile, over the past week, more than $10 billion has been removed from the global crypto market with its value still above $1.12 trillion, down by 0.5% in the past 24 hours. The slight decline is a result of the notable movement from larger crypto assets such as Bitcoin and Ethereum down by 0.2% and 0.7% respectively in the past 24 hours.
Featured image from Unsplash, Chart from TradingView
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