Cryptocurrency platform, Voyager Digital has announced it has issued a notice of default to the crypto hedge fund, Three Arrows Capital (3AC).
The default in question is estimated to be worth over $650 million featuring 15,250 Bitcoin (BTC) and $350 million in USDC. With 3AC not being able to pay the loan, Voyager Digital said its legal team is collaborating with the company’s advisors to know the best way forward.
While the current crypto market meltdown has exposed the frailty in the woes of Three Arrows Capital (3AC), it has by no means exempted the challenges of Voyager Digital also. However, Voyager has affirmed that it will continue to operate normally despite the default, reassuring its investors and clients that it has deep liquidity from the availed credit facility from Alameda Ventures.
“We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands,” said Stephen Ehrlich, Chief Executive Officer of Voyager.
Voyager Digital has continued to operate normally, and it’s still fulfilling customers’ orders and withdrawals. As Voyager Digital confirmed, it “has $137 million cash and owned crypto assets on hand. The Company also has access to the previously announced US$200 million cash and USDC revolver and a 15,000 BTC revolver from Alameda Ventures Ltd.”
While it has drawn $75 million of the funds from Alameda, it confirmed that it can still access the funds should it need them in the near term.
A Triad of Troubled Crypto Firms
The current realities in the digital currency ecosystem today have plunged a lot of crypto firms into very challenging operational pressures as many are unable to meet their core obligations. Beyond 3AC, crypto lender Celsius Network is considering all options to get its business back on board after pausing withdrawals on its platform earlier this month.
BlockFi is also in a similar situation but has tapped a $250 million bailout fund from FTX Derivatives Exchange. This bailout is similar to the $200 million secured from Alameda Ventures by Voyager Digital.
The encompassing liquidity challenge has trickled to cryptocurrency exchanges, but these trading platforms are responding to these in the form of job cuts.