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Crypto Broker Voyager Digital Says Three Arrows Capital Has Not Repaid $666 Million In Debt

Crypto Broker Voyager Digital Says Three Arrows Capital Has Not Repaid $666 Million In Debt

crypto broker voyager digital Ltd.

voyage -50.00%

said that if the crypto hedge fund fails to make loan repayments by June 27, it may issue a default notice to Three Arrows Capital Ltd.

Voyager Digital said it gave 15,250 bitcoins and $350 million in USD coins to Three Arrows Capital. The company initially asked for a repayment of $25 million worth of coinsurance by June 24 and then the full balance by June 27. These loans are $666 million based on the current price of bitcoin. None of these loans have been repaid, it said.

Three Arrows Capital hired legal and financial advisors after suffering heavy losses from a broad market sell-off in digital assets. The hedge fund is exploring options, including a sale of assets and a hedge by another firm, the firm’s founders told The Wall Street Journal last week.

Voyager said it is discussing legal procedures to seek compensation for his potential losses. It is not able to estimate how much it will be able to recover from three arrows.

Voyager Digital also said that it secured a substantial loan from crypto trading firm Alameda Research to meet “customer liquidity needs”. Voyager said the loan, which includes $200 million in cash plus USD Coin and 15,000 bitcoin, will be used to “protect customer assets in light of current market volatility.” The two lines of credit expire at the end of 2024 and have an annual interest rate of 5%, payable on maturity.

Voyager shares traded on the Toronto Stock Exchange are down 95% this year, according to data from FactSet.

Many crypto companies are under liquidity pressure in what is known as the “crypto winter”. Investors are dumping speculative assets such as cryptocurrencies as the Federal Reserve continues to raise interest rates to tame higher-than-expected inflation. Large crypto-dealing companies such as Coinbase Global Inc.,

BlockFi and have announced hundreds of job cuts, partly in response.

On Tuesday, crypto lender BlockFi signed a term sheet to secure a $250 million revolving credit line from Alameda founder Sam Bankman-Fried’s FTX exchange to boost its balance sheet.

When one of the largest crypto lenders, Celsius Network LLC, froze customer accounts on June 13, the crypto market was sent into a tailspin. Celsius did not allow users to withdraw funds for more than a week due to “extreme market conditions”. Asia-based crypto lender Babel Finance last Friday suspended redemptions and withdrawals from all products, citing unusual liquidity pressures. The firm reached preliminary agreements on the repayment period of certain loans, but did not allow redemption to resume.

Neither Alameda nor Voyager were available for further comment. Three Arrows Capital did not immediately respond to a request for comment.

The WSJ’s Dion Rabouin explains why Wall Street is betting big on crypto now and what this means for the new asset class and its future. Photo Composite: Elizabeth Smelov

Write to Vicky Ji Huang at [email protected]

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Crypto Broker Voyager Digital Says Three Arrows Capital Has Not Repaid $666 Million In Debt

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