Crypto lender bankruptcies: Celsius, BlockFi and Voyager compared

How does a crypto lender work and where does the risk sit?

A crypto lender takes deposits in coins and promises interest. To pay that interest, it lends the coins to borrowers or invests them. The customer holds a claim on the lender, and the lender holds claims on its borrowers. A chain of claims links the customer to people the customer never met.

Risk sits in every link, and the customer sees only the first one. A borrower that fails, a token that falls, or an exchange that freezes can leave the lender short of coins to return. The 3 cases below show the chain in action, each with a different first link.

How did Celsius reach its June 2022 freeze and bankruptcy filing?

Celsius offered interest of up to 6.2% on bitcoin and reported 1.7 million customers in June 2022. It paused all withdrawals on 13 June 2022, citing extreme market conditions, and filed for Chapter 11 bankruptcy on 13 July 2022.

A declaration reported a $1.2 billion deficit, with total liabilities of $5.5 billion including $4.7 billion owed to users. In January 2023, a judge ruled that deposits of about 600,000 customers belonged to Celsius under its terms of use.

What led Voyager Digital to file after the Three Arrows Capital crypto loss?

Voyager Digital was a cryptocurrency brokerage founded in 2018 and based in New York. In June 2022, it announced that Three Arrows Capital had not repaid loans totaling $666 million. On 1 July 2022, it suspended trading, deposits, withdrawals and loyalty rewards, and on 5 July 2022 it filed for Chapter 11.

In September 2022, FTX won an auction with a bid of nearly $50 million, and FTX then filed for bankruptcy in November. In December 2022, Binance.US won the bid for Voyager’s assets at approximately $1 billion. In August 2022, a judge approved the return of $270 million in frozen customer cash.

What path took BlockFi from its 2017 founding to a bankruptcy filing?

BlockFi was founded in 2017 by Zac Prince and Flori Marquez and based in Jersey City. In February 2022, it reached a $100 million settlement for failing to register loan products. In July 2022, FTX agreed a deal with an option to buy BlockFi for up to $240 million, along with a $400 million credit facility.

On 14 November 2022, BlockFi disclosed significant exposure to FTX, and it stopped customer withdrawals in November. It filed for Chapter 11 on 28 November 2022, with more than 100,000 creditors. In October 2023 it emerged from Chapter 11 and announced a wind down of its remaining operations.

How do Celsius, BlockFi and Voyager compare on dates and triggers?

The 3 freezes cluster in 2022 around 2 shocks. Celsius and Voyager froze in June and July, after the Terra collapse and the Three Arrows Capital default. BlockFi froze in November, after FTX stopped withdrawals. The first link differed, yet the result was the same: customers could not reach their coins.

The table shows the dates. Celsius paused first on 13 June 2022, Voyager followed on 1 July 2022 and BlockFi came last. Filing dates run from 5 July to 28 November 2022, and the gap shows how the shocks passed from one stage of the market to the next. A reader who builds a timeline can place each lender next to the event that triggered its freeze and see the order of cause and effect.

What did customers of these crypto lenders face after the filings?

Outcomes differed. Voyager customers saw a court approve the return of $270 million in frozen cash in August 2022. BlockFi announced in October 2023 that customers would receive their crypto back until assets were fully liquidated. Celsius depositors in the ruled group became unsecured creditors.

Contract terms shaped the result. Where terms gave the lender ownership of deposits, customers joined the creditor line. Where terms or court orders kept customer assets identifiable, returns came faster, and the cash frozen at Voyager is an example of such a return. This is why the contract matters as much as the rate. A lender that states in plain words who owns the coins gives the customer the most important fact before the first deposit, and a customer can ask for that sentence in writing.

What pattern do the crypto lender bankruptcies share?

3 elements recur. A promise of interest that required the lender to deploy the coins. A link to a failing counterparty, whether a fund, a token or an exchange. A freeze that came after confidence had gone, which left customers with the last information instead of the first.

None of these elements needs a price forecast to detect. Each can be asked about before a deposit: where are the coins deployed, to whom, and what happens if one borrower fails? A lender that publishes the answers with dates gives you a baseline, and you can compare it with the next report.

Which 4 checks help a reader vet a crypto lender before depositing?

4 checks apply. Read the terms for who owns the deposit. Ask who the main borrowers are and how large the biggest exposure is. Ask for audited reserves. Ask which regulator supervises the platform and what happens if withdrawals rise together.

The EQOS Asia method page shows how such checks feed a structured score, and the contact page lets you bring a counterparty question from your own treasury.

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About the author

Stéphane Jambu

President, EQOS Forecast Asia

Stéphane Jambu leads EQOS Forecast Asia and works as a consultant in e-commerce, search visibility, and AI. LinkedIn profile