The Voyager Digital platform has declared that Three Arrows Capital (3AC) has defaulted on the debt between the two companies. The dispute is over a loan of 15,250 BTC and 300 million USDC.
3AC fails to pay Voyager Digital
Last week, cryptocurrency platform Voyager Digital had made official the critical situation it was in due to a loan from Three Arrows Capital (3AC). Today, the company has officially declared the latter in default.
It turns out that 3AC took out a loan of 15,250 BTC and 350 million USDC from Voyager. While the investment fund is undergoing numerous liquidations, it had an ultimatum to repay 25 million USDC by 24 June and the balance of the debt by 27 June. None of the debts have been honoured.
However, Voyager has indicated that it intends to be repaid by 3AC. As a result, its legal teams are working to explore the various options available to the company.
While the company is publicly traded, it is currently trading at $0.54. This represents a discount of more than $1.00 to the market price. This represents a discount of over 98% from its high of $30.2 in April 2021.
Voyager share price
Alameda Research in support of Voyager
While this position has put Voyager Digital in financial difficulty, Alameda Research, Sam Bankman-Fried’s fund, has extended a $200 million line of credit and 15,000 BTC to the platform.
The deal gives Voyager some ammunition to avoid defaulting on payments to its customers. Last week, the platform lowered its daily withdrawal limit from $25,000 to $10,000 in order to prevent this risk of insolvency.
Alameda Research indirectly owns 11.56% of Voyager’s shares. For legal reasons, the loan between the two companies can only be released up to USD 75 million every 30 days.
Thus, Voyager initially has $75 million at its disposal, in addition to equity of $137 million in fiat. The platform also has a portion of its cash in cryptocurrencies, but we don’t know how much. The platform’s CEO, Stephen Ehrlich, also reassured the community that it is working hard to manage the situation as best it can. :
We are working diligently and quickly to strengthen our balance sheet and pursue options to continue to meet customer demands for liquidity.
On the other hand, the company has sought the services of investment bank Moelis & Company, for financial advice.
As for Three Arrows Capital, it has been stingy with information to the general public about its situation. Only a single tweet was published on 24 June, stating the company’s commitment to resolving the issues:
Committed to working this out, do not believe all that has been written about us.
– Three Arrows Capital (@3arrowscap) June 24, 2022
As for Zhu Su and Kyle Davies, the fund’s founders, while they were relatively active on Twitter, they too have been strangely silent since the affair broke out.
