Crypto Broker Voyager Digital Issues Notice of Default to Three Arrows Capital

Crypto broker Voyager Digital has issued a notice of default to hedge fund Three Arrows Capital (3AC).

Bishal Kumar Chanda3 min read
Crypto Broker Voyager Digital Issues Notice of Default to Three Arrows Capital

In another sign of stress in the embattled crypto industry, Crypto broker Voyager Digital has issued a notice of default to hedge fund Three Arrows Capital (3AC).

As disclosed in a previous statement, 3AC has failed to pay its 15,250 Bitcoin and 350 million USDC loan. According to today's prices, Three Arrows Capital owes a total of $673 million to Voyager Digital.

In a market update by Voyager Digital, the broker stated that it's currently exploring available "legal remedies" with its advisors. Voyager seems to be making good on its promise to pursue the recovery of its funds from hedge fund 3AC.

3AC insolvency

As claimed by Voyager, it had previously requested a partial $25 million USDC repayment by June 24. Further, the crypto broker added that it sought full compensation by June 27.

However, neither of those requests have been met yet, leading to the default notice and claims of 3AC's insolvency. Meanwhile, a default notice is a former response issued by a lender whenever the borrower misses a loan payment. While such a loan doesn't ensure the payments would be made whole, it means that the initial collateral would be collected soon.

But although Voyager intends to recover the entirety of the loan, it is "unable to assess at this point the amount it will be able to recover from 3AC."

Additionally, Voyager has disclosed having $137 million in cash and crypto as of June 24, 2022. Moreover, the company assured its users that the platform continues to operate and fulfill all user orders and withdrawals.

Apart from these, to help its efforts to stabilize amid its exposure to 3AC, Voyager has employed global investment bank Moelis & Company as its financial advisers. Voyager CEO Stephen Ehrlich said that his team is currently working to strengthen company balance sheets and pursue other options to comply with users' liquidity demands.

3AC's Insolvency Woes

The Once a darling of crypto's bull market, 3AC, has been hit hard with liquidity issues in the recent market downturn. With the implosion of the Terra ecosystem, several firms like BlockFi, BitMEX, and Genesis Trading have liquidated 3AC's outstanding loans.

BlockFi liquidated 3AC

On Wednesday, Voyager's share prices went on a downward dive plummeting 60% as the firm revealed its exposure to 3AC. The following day, Voyager reportedly cut its withdrawal amount to $10,000.

Amid the crisis, Sam Bankman-Fried's crypto exchange FTX and trading firm Alameda Research have stepped in to bail out several affected firms.

Reportedly, Voyager received a $500 million revolving line of credit from Alameda Research. At the moment, the firm said it had accessed $75 million worth of funds from Alameda.

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