Crypto broker Voyager Digital has secured loans from Alameda Research to help get it through the current market turmoil.
Alameda Research is a quantitative trading firm of the FTX founder Sam Bankman-Fried. Through the $500 million loan, Voyager Digital aims to safeguard client assets amid “current crypto market conditions.”
In a statement published on Voyager’s website on Friday, the firm added that it would do so “only if such use is needed.”
Meanwhile, Voyager signed a non-binding term sheet, and its line of credit is divided into two parts. The first is a $200 million credit facility from Alameda Research that combines a mix of cash and Circle’s stablecoin USD Coin (USDC). The second is a revolving line of credit for 15,000 Bitcoins, worth around $302 million as of writing.
The line of credit expires on Dec. 31, 2024, and has an annual interest rate of 5% payable on the maturity date. In addition to the new funds, Voyager has already made more than $200 million on its balance sheet.
“Today’s actions give Voyager more flexibility to mitigate current market conditions and strengthen our relationship with one of the industry leaders,” said Voyager CEO Stephen Ehrlich.
Additionally, the Alameda Founder and FTX CEO have also stepped in and bailed out crypto lender BlockFi with a $250 million line of credit. “Even if we weren’t the ones who caused it or weren’t involved in it. I think that’s what’s healthy for the ecosystem, and I want to do what can help it grow and thrive,” he added.
Is Voyager Digital On The Verge of Insolvency?
The crypto market has been going through one of its most painful weeks since December 2020, as token prices crash and companies struggle to stay afloat. As liquidity disappeared from the market, crypto lenders Celsius Network and Babel Finance suspended user withdrawals.
Meanwhile, Three Arrows Capital is struggling to secure additional financing after speculations of insolvency. In addition, several crypto firms are laying off staff, including Coinbase, Gemini, and BlockFi.
While all these companies admitted to facing liquidity crises, market participants believe the contagion isn’t limited to just these names. The Voyager loan announcement came right after speculations of it being another firm facing insolvency.
Citing a speculative report suggesting Voyager’s insolvency, Nansen CEO Alex Svanevik called out Voyager on Twitter, asking it to be transparent about its position. However, Voyager said that the speculation is “unequivocally false.”