Autopsy report

Voyager Digital

VGX | Lending / Broker

InsolvencyDied Jul 2022

A retail crypto broker that lent customer assets to Three Arrows Capital. When 3AC defaulted, the loss blew through Voyager's balance sheet and it filed for bankruptcy within weeks.

Missed warning signs

1-1y
2-1y
3-3mo
XDeath

Spacing is ordinal, not to scale. Numbers match the list below.

1
Marketing implied FDIC-style protection that did not apply to crypto deposits.
Visible 1 year before death | Misleading safety claims
FDIC / Federal Reserve Reuters
2
High yields were funded by re-lending that was not fully disclosed.
Visible 1 year before death | Yield with no source
Reuters
3
The loan book was concentrated in a single, opaque borrower (3AC).
Visible 3 months before death | Concentrated exposure
Reuters CNBC

The lesson

Your 'safe yield' was someone else's leverage the whole time.

Sources

Crypto lender Voyager Digital files for bankruptcyReuters
Crypto Broker Voyager Digital Suspends WithdrawalsThe Wall Street Journal
FDIC and Federal Reserve Issue Letter Demanding Voyager Digital Cease and Desist from Making False or Misleading Representations of Deposit Insurance StatusFDIC / Federal Reserve

Similar graves

Editorial summary of public reporting. Allegations are labeled as allegations. Not financial or legal advice.

Don't read the next obituary from inside it.

The lab reads live markets so you see the signs in real time, not in the rearview.

Subscribe - $20/mo