 Great welcome digital asset news. My name is Rob and today is the thumbnail the title suggests we got a lot of things to go Over so let's not beat around the bush and just get into it We're gonna talk about is we're gonna quickly go over the market how it's actually reboundable bit Then we're gonna talk about Voyager What led to this chapter 11 bankruptcy and the warnings that were all around us? I'm gonna take a look at the actual announcement itself We're gonna take a look the documentation of the chapter 11 that was actually filed today And take a look at what the document actually says then we're gonna get into Voyager trust as far as FDIC Insurance and go from there. So before we get into it Let's just quickly take a look at the market itself and today's I mean for the market. It's pretty good I mean, we're up a little bit so we're up about 3.3 percent almost Around 950 billion for the market cap bitcoins up a theorems up tether USD are down Which means people aren't selling off and putting into stables Finance coin everything's up up up except Wow 11% for avalanche good for you avalanche holders 4% to present 6% for change What five we change 9% for the sandbox fascinating? So that's the market, but that's not what everybody's here for What we're here for is this this Voyager chapter 11 and exactly what's going on So we're gonna take a look at what led up to this bankruptcy And it comes it comes down to we all know about three arrows capital Well first everything happened with Luna and then three arrows capital is it got tentacles into everything and the people that's Loaned to that's a black vortex that just swallowed up all different assets and of course is now in bankruptcy and Going through the whole process and the BVI British British Virgin Islands. Well, these things were going along of course, we took a look at Celsius and On on June 12th actually June 9th 10th and 11th I was at consensus in Austin and it was a it was an odd thing because I was sitting there talking to a bunch of people A bunch of heavyweights in the industry and they're like, you know We saw it coming for them from all over the place and Celsius was gonna go down And are they're going to go down because of this three arrows capital? And I'm like, hmm when I get back I probably should do a video on that did it on June 12th within nine hours after I did it Run 11 o'clock Celsius shuts off the withdrawals and then of course moving forward. We saw nice posts like this which We're from Steve Erlich the CEO of Voyager any states budget will see us as customer assets are safe and crypto Amid crypto collapse and it goes into this long History of exactly what it was. This was on June 14th. So we're like, okay And of course we heard about the loan from Alameda research for I mean everything kind of just added up to around 350 million dollars worth of loans which kind of covered everything that happened with 3ac however This was on June 14th and as things went along some things became apparent and came out and During this time. This is when I got concerned and and you know on this channel I have talked about Voyager a lot If there is any Platform I've talked about probably Voyager quite a bit So it pained me to get the information that came to my attention, especially with the collateral issue And we took a look at that This was on June 22nd. I couldn't I could have ignored it and looked the other way and go that'll be okay Good team the things I talked about things that are going on but it didn't add up Things didn't add up and of course we put the rules down We talked about those rules things that come forth But we talked about this in this video on June 22nd 40 or four minutes or so take a listen Voyager came out on June 14th and because of this situation says we manage risk and prioritize the security of customer funds first and foremost We keep things simple no defi lending activities Let me say that again. No defi lending activities, which is what? It looks like Celsius has been doing or had done Which leads leads to a little ruination. No algorithmic stablecoin staking in staking which again Luna Tara Celsius no derivative assets and certainly no staked ETH our straightforward low-risk approach to asset management is the result of our decades of experience leading companies through market cycles We have the experience to back our decisions and whether any bear market and here's the thing In a lot of ways, they're right As far as risk management, they are very good. They all take they do take a look at Some of the most trusted individuals in the space and they make those loans out to them only there's no defi thing unfortunately Here's the problem They had a big loan out Two three arrows capital. I think this has been going around but there's there's some nuances to this that I think Are kind of important especially when we talk about collateral 5 billion Crypto assets collateral payable 20% so that's this this is the what what concerns me and I was thinking myself Well, maybe that's not right. Maybe Maybe I'm just not looking at correctly because it's just a snippet of someplace else. So There was a press release. This is from same place PR newswire And if we come down here, it's the same thing. This is directly from Voyager and USD in thousands crypto assets held I don't understand respectively. So this is in march 2022 and as compared to june 30th crypto assets loaned and collateral so That's uh, that's what I see So, let me know what you think about that in the comment section and uh We'll go from there That's uh, that's pretty good. I'm just take I took a quick look at the comments. It's pretty funny and then um There is one more thing I like to say you see this these rules underneath me I just put these rules out two days ago the rules And I said I wouldn't remove them because I think they should stay for ever Because these should be some of the rules that I think uh that I will adhere to you don't have to adhere to them because this isn't financial advice from an financial advisor But for me the rules are this I always think to myself anything that I invest into it's already gone meaning In my head, I have just think myself. Well, whatever I invest into I'll probably lose it And I can only invest more than I can afford to lose So if I'm okay with putting 20 bucks into bitcoin and going well, this isn't going to crush me I'm okay Or if I look at my bank account and put my entire life savings Into uh dogecoin or even bitcoin Then maybe it's not the best place for me. The next one is everything's a scam Treat everything like a scam until proven otherwise and you'd be a lot happier person. I can guarantee that and the next one is zero percent exchanges and I don't know what's going on Uh, I said the same thing with Celsius. It seemed like a little bit off So I on last sunday. I said not this sunday the last sunday for last in the 12th I said you should if you don't feel comfortable and is the yield really worth it then take it all out And the same thing here Now I will still use Voyager because I still have to buy crypto when I dollar cross the average and when I want to sell But I don't have to keep it there if I don't want to and there's some cryptos that you can't take off of Voyager and other Exchanges so for that you have to decide is it worth it to buy this crypto and leave it there or not Maybe I want to put it into a ledger. Maybe I only want to put in my metamask. It's up to you I can't tell you what to do and let you debt So these are just the things that have kept me a little bit safe. The next one is no leverage It's just the rest of disaster. The last one is take profits. Stop being so greedy. Trust me I get into that pit myself So that takes care of that section. I know what you think and uh, I'll let you decide So that was on june 22nd Celsius video is on june 12th and here we are today I will tell you one thing and I talked about this when after Celsius collapsed And is going through their restructuring process Where I messed up Was I listened to people too much? And when when when people said rob shut up Because they'll get it. They'll understand people will get in their heads And they'll see it from Celsius and they'll take everything out. So stop telling us these stupid rules I messed up because I should have been telling everybody my rules constantly Like every video and I will not be making that mistake again So if you're sick of hearing those rules And you don't want to hear them anymore. That's fine. I'll see you later From now on out. It's just like marketing Everybody has to hear these things three five 10 20 times before they get it through their head About the things to do You'd think that we would do these things, but it doesn't happen as naturally as that So I'll rectify that right now anyhow, so moving forward Voyager, here's the announcement itself So this is from Steve Erlich and he says hey This was just this morning today We began a voluntary financial restructuring prospect assets in the platform maximize value for all stakeholders especially customers mean you And emerges a stronger company and if we take a look at The thread there's a couple of gems in here And and some and some platitudes we strongly believe in the future of the industry But the prolonged volatility in the crypto markets that defaulted three hours capital requires to take this action Well established legal process whereby companies reorganize their financial obligations to emerge as strong organizations provides an efficient An equitable mechanism to maximize recovery our goals to come out a stronger organization We'll see we'll take a look at the document As part of this process the proposed plan of reorganization will resume account access And return value to customers that's not happening anytime soon. I'm I'm pretty sure about that one Under this plan which is subject to change given ongoing discussions of the parties And there's 60 parties they're discussing and requires court approval customers with crypto and their accounts will receive in exchange a combination of the crypto in their accounts one proceeds proceeds from the three arrows capital recovery to Common shares the newly reorganized company three And voyage tokens or vgx some of you do not want that I can tell you right now But I can tell you if they do go through this That'll be a big sell-off We're actively pursuing all available remedies for recovery from 3ac including Of course through them from their the bvi in new york where our three arrows capital have Incorporated and put in their bankruptcy paperwork It's important to note that as part of this announcement we are confirming that customers with usd deposits in their accounts will receive access to those funds after a reconciliation and fraud prevention process With metro commercial bank. I need to say that again It's important to note that as part of this announcement. We are confirming that customers with usd deposits in their account Will receive access to those funds after reconciliation and fraud prevention process with metro commercial bank and we're going to get into that At the very last part from friend of the show paul barone as he talks about fdic insurance so Uh traditional information by the chapter 11 process blah blah blah not important. Okay, so that's the first part and it gives me We'll we'll talk all about it But this is from simon dixon as he talks about the restructuring process with celcius network And he even said look if celcius network moves to chapter 11 We have a top tier team to support depositors first We have strategy with the ears the board We will have the ears of chapter 11 as we prepare in that case blah blah blah so simons also going to be doing a Twitter space is to talk about all this so you can follow him at simon dixon twit You can find simons information in every description of my video at the very last part There's like eight people that I listen to almost every day and simons one of those guys So this is great. This is nice, but we need to break it down We need to talk about What is the chapter 11 as opposed to chapter 7 How well have these companies done getting out of chapter 11 and the companies that have to come out of chapter 11 What kind of companies are those as far as hard assets as opposed to financial industries? And then we'll take a look at the actual document so you can make some more informed decisions. So first off This is from investopedia And it talks about and I want I want you you'll probably be able to figure this out pretty quick What the difference is between all these companies? These are the ones that that have actually gone through chapter 11 and have come out successfully apple This is a 97 Microsoft came in and gave them 150 million bucks, which is kind of crazy because they're a trillion dollar company now Uh, and the reason that some people speculate them that Microsoft only did this because it was worried that regulators were regarded as a monopoly without the competition from apple in the marketplace so pretty good Point there remember, uh, steve jobs and bill gates hated each other at first They were friends then they hate each other and then the towards the end of steve's life steve jobs life That became good friends again And they were attached to the hip Next one was general motors and of course they came out of it with the help of the government ally financial Same thing chrysler marvel entertainment six flags texaco and sabarro So what's different between all these companies? Well, they all had hard assets most of them apple did gm did chrysler did marvel does Six flags texaco and sabarro has pizza. I guess so the difference was that ally financial was a financial company on and That is a big difference as far as hard assets However, I will say this the reason why they were bailed out was because they were part of the us treasure department's bailout When they bailed out gm because ally financial is the auto financing arm of general motors. So that sucks, right? You're like, well, that's bad What about financial companies? That's a great question Here's a couple of examples and I pulled these examples We're going to go over this from the actual chapter 11 documentation and these people Uh, the the moelles and company that are helping with this chapter 11 restructuring Also were a part Of the restructuring of these financial organizations to get out of chapter 11. So this one's ambeck This is uh, April 29 2013 ambeck's principal operating subsidiary Ambeck assurance corp is a guarantee of public finance and structured finance obligations one thing to note about this is that Uh they came Under bankruptcy or chapter 11 on november 8 2010 and it took them three years to get out Well, two and a half. There's some around there So that's not great. Have a look at this one Walter investment burdens from chapter 11 changes name to die tech holding company or die tech financial This was listed on february 9 2018 and again this company, which is now called die tech holding Was also a part of the restructuring plan from moelles and company and they Had a financial restructuring plan, which eliminated 800 million in debt and emerged from chapter 11 bankruptcy back in december Walter announced that it planned to follow for chapter 11 That's part of a pre-practice restructuring plan to cut its debt by a million Going forward the company will continue to serve customers through its subsidiaries die tech financial like an 800 million financial company. So that's where we have To kind of say well don't want a ton of hard assets Financial companies can actually make it does this mean that this is the norm and everybody comes out of chapter 11 Absolutely not And that's what we'll get into with this first of all. What's chapter 11? And what's the difference between chapter 11 and chapter 7? Well Following for chapter 11 bankruptcy protection simply means that a company is on the verge of bankruptcy But believes that it can once again become successful if it's given an opportunity to reorganize its assets debts at business affairs, which sounds a lot like what Voyager needs to do especially with all those Loans not all those loans, but the maximum amount of loans for three hours capital just kind of screwed up everything. Let's be honest and What's the difference between that and chapter 7 well chapter 7 means you're going to seize company operations And leads the total liquidation of assets to creditors. So not there Like we think we can still do it chapter 11 So while chapter 11 can spare a company from declaring total bankruptcy the companies bondholders and shareholders are usually in for a rough ride that's me and you When a company files for chapter 11 protections shares value typically drops significantly as investors sell their positions Well, that's just for the stock option The assets the digital assets is the big question And that is the biggest that is the big thing Uh after chapter 11 filing once chapter 11 bankruptcy was filed The federal court appoints one or more committees that are tasked with representing working with creditors And shareholders of the court to develop a fair reorganization Sometimes after reorganization a company will issue new stocks that's considered different from the pre Reorganization stock if this occurs, especially to know whether the company has given its shareholders The opportunity to exchange the old stock for the new stock because the old one is considered useless So that's the that's the whole thing of what he talked about here Where he talks about hey, we're going to give you some type of uh share into the company again I don't think that's what people really want. They just want all the crypto again assets so Here's another thing There's some misconceptions Because when I see bankruptcy, I'm like, oof. This isn't good However, we try to get the most information we possibly can Here's five some five misconceptions. First of all bankruptcy doesn't mean going out of business Well chapter seven business banking, which we talked about liquidation Chapter 11 allows the business to restructure its debts and remain in operation. The question for me Is one do they turn on those withdrawals one do they actually Start the trades again Business is going through chapter 11 often downsizes part of the process, but the objective is reorganization out liquidation And I will say this remember what hurts went through Chapter 11 bankruptcy. Yeah, neither do I they did and during that whole time for bankruptcy people were renting cars Using those cars and going out of there again hard assets a little bit different Some companies don't survive the chapter 11 process obviously and then we talked about the ones that actually make it stores remain operational We'll see chapter 11 requires a one-size-fits-all approach Companies can seek chapter 11 protection to halt litigation And collection efforts negotiate with its creditors and frozen and confirm a plan of realization Many companies enter chapter 11 have no intention of reorganizing as a going concern The primary purpose of many cases that quickly quickly conduct a sale in which a buyer's buyer acquires the debtor's assets This is why we're when we take a look at this right now You're gonna see that they wanted to get they wanted people to come in and buy these assets and keep things going Chapter 11 is a long run-up process. Well, we just saw That with walter investment took three months. That's not too bad However Uh chapter 11 cases can wrap up in as little as 24 hours in 2019 Sunguard availability services emerge from bankruptcy a mere 19 hours after its case was filed. Does that mean that's going to happen here? No I'm not saying that. I'm just saying that you've got a long a big swath of time frame Less than 24 hours three months three years 11 years A lighting fast bankruptcy is known as a prepackage case or prepackin involves negotiation with creditors and voting on a chapter 11 plan before the bankruptcy case has even been filed And then here's another one a bankrupt company has plenty of money because it doesn't have to pay its creditors That's a misconception most chapter 11 debtors enter bankruptcy with millions of dollars in preposition debts That's that accrued before they filing by withdrawing payments to lenders landlords on the creditors, which is what they did to us Most debtors cannot rely on cash flow alone to get through chapter 11 Obviously, they're gonna need outside people to come in and say, hey We'd like to buy these things when we partner up go from there We'll talk about the 60 companies Even if the company is aggressively cutting operational costs from the process in almost all cases of any size Debtors must seek debtor in possession financing to help them get the other side. That's paramount Customers and vendors will flee and this is what I was talking about as far as hurts. So that's that part Now let's talk about So we know what chapter 11 is. We know what chapter 7 is We know it doesn't mean ceasing operation We know that it's not the best place to be and we know that sometimes people can come out even financial companies But it's more likely with hard assets now. Let's take a look at the actual documentation Which comes from the filing from new york? This is what we know Let me blow this up so you can see a little better This was filed on july 6th And chapter 11 who did this jared durmont Is a managing director and head of the financial institutions group uh at moellis and company lc. Who the heck are they? These these guys moellis and company is a global independent investing bank. We talked about this before There's some guy Uh, they're global and they've got 3.5 trillion Of transactions with deal size ranging from 100 million to 160 billion. So they're no slouches They've been in the game again. We got this information from Uh, these are were the part of their restructuring processes. Also, they were part of orchard brands, which was uh 420 million a debt just another type of company But to get back to it. Here's what this says And this is from jared again I submit this declaration of the debtor's petition pre petition efforts to effectuate An out-of-court transaction as an alternative to filing voluntary petitions for relief Okay halfway through I've been involved in many notable chapter 11 cases and restructuring assignments Including his lead investment banker and jason industries chapter 11 realization And then this is where they talked about Where we just talked about all the different ones that they were a part of there was way more in here I Have linked this in the description So you can read the whole thing if you want to these are all the different organizations that they have gone over in the 10 plus years Because they some of them go back to 2013 2010 actually And then this stuff I even highlight so 18 billion From sound thanks cooperation. They're gonna have billion of financial guarantees policies to assured Corporation so on and so forth That's not important I mean It's important to see if they actually have a tremendous amount of experience This is the interesting part more or less was engaged by the debtors in june 2022 to advise the debt the debtors Which is wager as to strategic alternatives in light of the debtor's effort to navigate the recent challenges impacting the crypto industry again june 2022 Beginning on or about june 20th 2022 my last initiative to dual track marketing campaign to solicit interest in two general deal structures one Or a a sale of the debtor's entire business To either a financial sponsor or a strategic company in the crypto industry think uh Sam bachman freighter ftx or Alameda research Be a capital raise whereby a third party Individually or as part of a consortium would provide a capital infusion in the debtor's business enterprise financing This cause and part by the decline of three acs in terrell. We know them Moela's reached out to 60 potential financial and strategic partners across the globe again How could they do that? Well, it's probably because you know They've done this many times and they've got partners all over the place and that's what they did by july 5th two days ago Over 20 of the potential counter parties had entered into a confidential agreement with the debtors non-disclosure agreement nda Parties who executed a confidential agreement received a copy of the debtor's investor presentation Access to a virtual data room business operation finance tax information corporate documents So they could just take a look at the books and go do we want to invest in this? Well, the debtor's marketing efforts yielded one proposal out of those 20 for an out-of-court financing the conditions president Press precedent to the proposal and the pro forma capital structure Contemplated there under were not achievable. So They said look time frame isn't going to happen. We've got some concerns, especially with the State of them of the crypto market can't do it And no other potential counterparty was willing to participate in an out-of-court transaction on the timeline required out-of-court transaction As they go through Maybe an in-court transaction. Maybe something else will happen down the line, but not now Potential counterparty has expressed concerns regarding current uncertainty in the crypto market, right? The aforementioned marketing process produces multiple preliminary proposals from parties willing to participate However, as a date thereof all the offers Said no because we need more time to fully develop and structure And must be evaluated for attractiveness against the potential standalone restructuring, which is why I kind of like what Simon Dixon is doing over here with Celsius Maybe potentially They come over here and say we can do the same thing. But again Be a long shot As the crypto market continued to deteriorate the debtors made the decision to place the platform on maintenance mode on july 1st By prohibiting customer withdrawals and essentially taking their services offline, which is why On june 22nd, we did the video telling people to take it off july 1st. They shut down transactions In line with the foregoing the debtors determined that filing for chapter 11 would maximize their chances of effectuating a transaction To help stabilize the debtors business and preserve the value of their enterprise and the best interest As well as their creditors customers employees and other parties in interest because They can't leak out anything and people can't use anything to take the money off, which is a bummer for us But it keeps things somewhat solvent Moela's the debtors will continue to work with the potential counter parties And we may engage the future to advance potential transaction structures that may be more beneficial to the debtors and their key stakeholders than any standalone restructuring whether these chapter 11 cases ultimately conclude with a transaction or A standalone restructuring the debtors and mollusk will continue their marketing process Interchanging the highest value of the debtors and all stakeholders available under the circumstances. So what does this all mean? for everybody Well, if you look at what's going on And see exactly what steve had talked about and talks about hey you know We would like To actually give out Where does it say here? This part here It'll be nice if this came to fruition during the reorganization. We'll maintain operations. We intend to certain customer programs without disruption Train deposit withdrawals and loyalty frauds employment program remain temporarily suspended I do not see them opening things up. I don't see them Doing this This chapter 11 is there to protect the company And I think what's going to happen until they get a concrete offer With someone who can come in and say yes, we would like to buy this or we would like to Purchase these distressed assets and yes, we'd like to go through the courts to do this thing This could be quite a long process. This doesn't mean this could take 11 years or like mount gox eight years potentially it could However, could it take three months like die tech holding company corporation? Sure anything's possible but I will tell you that The chances of all these things just just falling in place during this bear market are not too fantastic What could happen in a year or two from now? It's anybody's guess But I can just tell you that there is one more thing I'd like to bring up So we know about chapter 11. We know about chapter 7 We know about the different companies that potentially could that did come out of chapter 11 But again, not every one of these companies come out a vast majority do fail Not his truth So the one thing that does concern me I mean everything concerned me these days Was this video that was put out by paul barone network And trust says to come out and you just can't buy you just can't buy that it's either there or it's gone and what he says here And one of the reasons was is because a metropolitan commercial bank put out a statement about what's going on So I want you to listen to this And then I'm going to take the q&a Again, just show up This is a minute and 31 seconds me Share my tab So you can hear it tat Here we go So take a listen. What's uh, what was said here? This gives me an incredible amount Of apprehension And distrust here we go A lot of this is really now boiling down to the fact that voyager does not have fdic insurance That is passed through insurance meaning your dollars are deposited within voyager They then deposit it in a bank account think of it that way at metropolitan bank And then you get that Insurance as a pass through to your deposit account over on boarder. That is not the case On voyager at all in fact over the weekend Metropolitan bank Issued this statement right here, which is fdic coverage available to voyager customers Voyager customer funds held by metropolitan commercial are insured by the fdic up to the maximum amount of coverage Per depositor under federal law the standard fdic insurance coverage is 250k for a depositor The fdic insurance coverage is available only to protect against the failure Of metropolitan commercial bank fdic insurance does not protect Against the failure of voyager any act or a mission of voyager and or its employees meaning what if they did something wrong Or in the loss in the value of cryptocurrency or other assets and we're talking about us dollars here But basically what they've said and they I think they headed this off at the past I'm simply saying if you're a voyager customer and you had us dollars in there We are not securing that as a federal deposit insurance and hence you are at risk as much as anyone else So that is a big And paul said it right that is a big Big issue and I will end it up like with this from what you just heard And that was a statement from metropolitan commercial bank. That is the bank that holds All cash from voyager to my knowledge Seems like no one tells me the full story anymore This is directly from steve erlich. It's important to note that as part of the announcement We are confirming that customers with usd deposits in their account will receive access to those funds After reconciliation and fraud prevention process is completed with metro commercial bank. Look I'm here. I'm not here to place blame on anybody. I'm not here to say this and this this I'm just here to give you both sides the same story And talk about my shortcomings of the rules The rules again below me Are never going to change and this is for me. You can do whatever you want. I'm not your dad This is what I do When I think about Investments, it's all gone. I think to myself Whatever I invest into now is gone. So never invest more than you can afford to lose Everything's a scam. Everything is a scam. Even if the things out of my mouth, you shouldn't even trust me Just go and say, you know what? I don't really trust me. Let me let me verify. I like rob But I'm I I'm going to verify not trust next one. Nothing on exchanges zero zero point zero So when this happens, we talked about on celsius june 12th Take it all off. We talked about this on voyager june 22nd. Take it all off This is not going to change from here on out Nothing gets left on the exchanges Did I leave some of the exchanges because I was using voyager to Dalek cost average while I was buying things once a week like I talked about didn't lose that much I talked to everybody about this on june 22nd Hopefully listen and hopefully they heard about celsius and go maybe some other ones are going to also suffer the same fate No leverage 25 500 x if you're a pro go ahead But for me, I'll never use leverage never Doesn't seem like a come out. I'm not a trader If you're a trader have fun again can't tell you what to do and lastly for me is take profits Nobody ever want broke taking profits and I can tell you right now almost 99.9 of people wish they would have taken more profits in the bull run And uh, there's a small percentage that don't but that's it. So again those rules stick around and uh If you don't want to hear those rules because I'll be talking about them every single day from now on Just unsubscribe because that's what's up So that's it for today and uh, again, I wish I had a little bit better news But these are the facts these are the things that are going on and we'll see how it all plays out