Voyager Digital halts trading and withdrawals after Three Arrows Capital default

Cryptocurrency trading platform Voyager Digital announced today that it has temporarily halted all withdrawals, deposits and trading due to “current market conditions,” according to Voyager CEO Stephen Ehrlich in a press release.

Earlier this week, Voyager Digital issued a standard warning to Three Arrows Capital, the crypto hedge fund whose recent apparent demise has sent shockwaves across the cryptocurrency industry, impacting other companies that have had exposure to it.

“This was a tremendously difficult decision, but we believe it is the right one given current market conditions,” said Ehrlich. “This decision gives us additional time to continue exploring strategic alternatives with multiple stakeholders while preserving the value of the Voyager platform we built together.”

A notice of default is a formal response issued by a lender whenever a borrower has missed payments on their loan.

Voyager Digital said it loaned Three Arrows Capital 15,250 Bitcoin (currently $296.1 million) and $350 million worth of USDC stablecoins, totaling just over $646 million currently. On Monday, the platform issued the standard notice for the apparently insolvent hedge fund. A notice of default is a formal notice to a borrower that he has missed payments on a loan.

On Wednesday, a British Virgin Islands court ordered Singapore-based Three Arrows Capital to liquidate its assets to pay off debt and financial obligations.

Three Arrows Capital, led by Zhu Su and Kyle Davies, has risen to prominence amid the crypto bull market of the past two years. However, the recent implosion of Terra (LUNA) and stablecoin UST has apparently dealt a significant blow to the fund, and other lenders such as BitMEX, Finblox and Deribit have taken steps to minimize losses and recover debt.

Voyager’s announcement today follows a move on June 22 to reduce the platform’s daily withdrawal limit by more than 50%, from $25,000 per day to $10,000 for each customer. The company’s share price has dropped 26% today and nearly 87% last month.

In today’s announcement, Voyager said it has engaged the services of financial advisors Moelis & Company and The Consello Group, and legal advisors Kirkland & Ellis LLP. “We are in discussions with various parties regarding additional liquidity and the forward strategy for the company,” the company said in a blog post.

*Translated with permission from decrypt.co.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

Check Also

US futures decline after two-day rally; OPEC+, US private employment, industrial production in Brazil and more

Asian markets closed in the blue, following the sharp rise of US and European stocks …