Voyager Digital Stops Withdrawals After 3AC Default

Voyager Digital stops withdrawals after the three arrows capital default citing current market conditions which led to a halt on all customer activity so let’s read more today in our cryptocurrency news.

Voyager Digital stops withdrawals but also deposits and trading on its platform. The company issued a default notice to Three Arrows Capital this week and the latter reportedly owes $646 million worth of crypto to Voyager. The trading platform Voyager Digital announced that it halted all withdrawals deposited and trading due to the market conditions.
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Earlier this week, the company issued a default notice to three Arrows Capital, a hedge fund whose apparent demise sent shockwaves on the entire crypto industry and impacted other companies that had exposure to it. Ehrlich added:

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

An update to customers: https://t.co/myyrQ6gZi7

— Voyager (@investvoyager) July 1, 2022

Voyager Digital said that it loaned Three Arrows Capital up to $296 million in BTC and $350 million in USDC which. The platform issued the default notice to the insolvent hedge fund and the default notice is actually a formal notice to the borrower that it missed the payments on the loan. The court in the British Virgin island ordered the Three Arrows Capital fund to liquidate the assets and repay debts and other financial obligations.

Three Arrows Capital led by Kyle Davies and Zhu Su rose to prominance amid the bull market in the past two years but the recent implosion of Terra and the UST stablecoin was hit with a harder blow and other lenders like Finblox, BitMEX, and Deirbit who also took measures to minimize the losses and debts. Voyager’s annoucnement came after the decision to slash the withdrawal limit by 50% and now the company’s stock prices dropped by 26% with 89% over the past month. In today’s announcement, Voyager said that it retained the services of the financial advisors Moelis and Company and the Conselho Group as well as legal advisors Kirkland and Ellips LLP:

“We are in discussions with various parties regarding additional liquidity and the go-forward strategy for the company.”

As of June 30, Voyager digital disclosed that it held $686 million of crypto assets but that it loaned out $1.12 billion worth and held $355 million worth of cash and $168 in crypto collateral. Earlier in June, Celsius also paused withdrawals due to extreme market conditions and the need to stabilize liquidity.