On Friday afternoon, crypto broker Voyager Digital announced temporarily halting all withdrawals, deposits, and trading, citing "current market conditions." Furthermore, even the Voyager-issued debit card has stopped working for users.
Earlier this week, Voyager Digital issued a notice of default to crypto hedge fund Three Arrows Capital (3AC). Reportedly, 3AC has failed to repay Voyager Digital a loan of 15,250 bitcoin and $350 million in USD Coin.
The loan is equivalent to about $646 million based on Bitcoin's current price.
"This was a tremendously difficult decision, but we believe it is the right one given current market conditions," Voyager CEO Stephen Ehrlich.
"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. We will provide additional information at the appropriate time."
Voyager's announcement to pause withdrawals follows a move on June 22 to reduce the platform's daily withdrawal limit. Earlier the crypto broker slashed the daily withdrawal limit by more than 50%, dropping it from $25,000 to $10,000.
After the announcement, the firm's stock price fell over 30% and nearly 87% over the past month.
Meanwhile, Voyager said it had retained the services of financial advisors Moelis & Company and The Consello Group. In addition, Voyager has also retained legal advisors Kirkland & Ellis LLP. "We are in discussions with various parties regarding additional liquidity and the go-forward strategy for the company," the firm added.
At the time of writing, Voyager has already accessed $75 million of this credit line. According to a release from Voyager, the default notice from 3AC does not break its terms with Alameda.
Apart from Voyager, the list of firms that lent crypto to 3AC has been mounting since it first confirmed financial problems. Many of 3AC's portfolio firms had already liquidated the crypto hedge fund in the past two weeks.