Crypto brokerage Voyager Digital (TSX: VOYG) announced on Wednesday that it has filed for Chapter 11, Ryan writes.

Why it matters: Fallout from the digital asset collapse and bad debt from crypto hedge fund Three Arrows Capital (3AC) continues to work its way through the industry, leading to now two bankruptcies.

Driving the news: Last week, Voyager Digital suspended all trading, deposits and withdrawals from its platform, citing market conditions and a notice of default it issued 3AC.

• The firm said that, through the reorganization plan, customers with crypto in their accounts would receive some combination of crypto, common shares in the newly reorganized Company, Voyager tokens, and proceeds of funds recovered from 3AC.
• Customers with USD deposits would receive access to those funds after a reconciliation and fraud prevention process.

By the numbers: Voyager says it has more than $110 million in cash and crypto assets on hand, in addition to $350 million in cash held in a For Benefit of Customers (FBO) account at Metropolitan Commercial Bank.

• The company has about $1.3 billion worth of crypto assets on its platform, as well as claims against 3AC of more than $650 million.

State of play: Voyager Digital was a primary casualty of 3AC's default, previously disclosing that the firm had an outstanding loan of 15,250 bitcoin and $350 million USDC with the brokerage.

• Voyager said it is pursuing all legal remedies for the recovery of those funds from 3AC.
• On Friday, 3AC filed for Chapter 15 bankruptcy in New York after a British Virgin Islands court ordered the firm's liquidation.

The intrigue: Last month, Voyager secured a pair of revolving credit facilities from Sam Bankman-Fried's Alameda Research.

• One was a cash/USDC-based credit facility worth $200 million, and the other was for 15,000 in bitcoin (worth about $300 million).
• But, in its bankruptcy filing, Voyager listed Alameda as its largest unsecured creditor, with a $75 million loan outstanding.

Of note: Voyager is far from the only struggling crypto firm to face tough decisions as a result of 3AC's collapse and subsequent crypto contagion.

• In just the past week, Singapore-based crypto lender Vauld said it is in talks to be acquired by UK firm Nexo, and BlockFi announced it could be acquired by FTX for up to $240 million.
• And crypto lenders Babel Finance and Celsius have also hired financial advisers and are evaluating the potential of initiating bankruptcy proceedings.