As of Friday, the US platform Voyager Digital has suspended withdrawals and several features on its site. The decision comes as the exchange found itself in trouble over a large loan it had made to Three Arrows Capital (3AC)
Voyager suspends withdrawals and other features
Cryptocurrency exchange platform Voyager has temporarily paused user deposits and withdrawals. This took effect on Friday and other services are also affected such as interest payments.
An update to customers: https://t.co/myyrQ6gZi7
– Voyager (@investvoyager) July 1, 2022
The difficulties encountered by the platform are a direct result of its dispute with Three Arrows Capital (3AC). Indeed, the latter’s default on payments, on a debt of 15,250 BTC and 300 million USDC, directly impacts Voyager. Stephen Ehrlich, CEO of the company, deplores the situation, but insists on the necessity of this measure:
“This decision is a major step forward for Voyager.
This decision, while far from optimal, will give us time to work on strengthening our balance sheet, which is necessary to protect the assets and preserve the future of the Voyager platform we have built together.
Voyager had already lowered its daily withdrawal limit before taking such measures. While the platform otherwise offers a crypto card, the latter is also impacted by the decision. Users are therefore advised to take action, for automatic payments debited to this card.
An uncertain future
For now, Voyager is exploring various alternatives to get out of this mess, but insists it has no definitive announcement to make yet. There is talk of calls for new funding. The company already has a loan of BTC 15,000 and $200 million from Alameda Research.
The company did not wish to comment further on its deal with 3AC and prefers to concentrate on the work to be done:
Voyager is actively pursuing recovery from 3AC through the court-ordered liquidation process in the British Virgin Islands and also intends to pursue all other available remedies.
Certainly, centralised platforms offer an undeniable convenience of use and a rich catalogue of services. On the other hand, the events of the last few weeks, as with the Celsius case, show the risks of these. While Voyager is paying for the collateral damage caused by the collapse of another player, the platform’s users are nonetheless suffering the consequences.
