tl;dr Summary: Crypto lending platform Voyager Digital stopped all withdrawals and trading on their platform after issuing a default notice to 3AC (Three Arrows Capital) amounting to $646 million.
In a letter to their customers dated Jul 1, Voyager Digital said that it “made the difficult but necessary decision to temporarily suspend trading, deposits, withdrawals, and loyalty rewards, effective at 2:00 PM Eastern Daylight Time on July 1.”
According to Stephen Ehrlich, Chief Executive Officer of Voyager, “current market conditions” was the reason for this decision. He explains that this decision will provide them time to explore strategic alternatives, which he describes as attempts to infuse additional liquidity into the company.
Voyager Digital had loaned 3AC 15,250 Bitcoin and $350 million in USDC stablecoins totaling more than $600 million. Three Arrows Capital is a bitcoin hedge fund whose recent downfall shocked the market and affected many other businesses that had exposure to it. The companies impacted included Celsius, Genesis, BlockFi, and others.
Earlier in the week, Voyager Digital sent a default notice to 3AC. After that, a British Virgin Island court-ordered 3AC to liquidate its assets to repay debts and financial obligations.
Voyager’s move came after they reduced the withdrawal limit by more than 50%, dropping from $25,000 per day to $10,000 for each customer on June 22. Their stock plunged to a low of $0.33 on Friday, making it a jaw-dropping 97% drop YTD.
According to a press release, the total amount of crypto assets loaned out by Voyager Digital, including 3AC, adds up to $1.12 billion.
