Voyager Digital Threatens 3AC With Default Notice Over $661 Mln Loan

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10w ago2022-06-22

Crypto broker Voyager Digital said on Wednesday that it may have to issue a default notice to embattled hedge fund Three Arrows Capital (3AC) over its debt obligations.

Voyager said its current exposure to 3AC consists of 15,250 Bitcoin ($311 million) and $350 million worth of USDC. The firm had made an initial request for repayment of $25 million USDC by June 24, and has requested that 3AC pay the remaining amount by June 27.

3AC has repaid neither of the requested amounts so far. Failure to repay the loan will result in Voyager slapping the hedge fund with a default notice, after which the broker will pursue recovery of the funds in a legal measure.

Voyager takes big hit from 3AC exposure

Voyager said in a press release that it in discussions with its advisors regarding any legal paths it can pursue over recovering its funds. The company is unable to gauge how much of its funds it will be able to recover from 3AC.

3AC is considering asset sales and bailout talks in the face of a potential insolvency. A sharp drop in crypto prices exposed the hedge fund to a series of margin calls that it was unable to meet.

Its exposure to the Terra crash also severely dented its finances. The hedge fund was seen selling most of its holdings to prevent an all-out liquidation of its positions.

Earlier this week, Voyager received a $200 million cash loan, and a 15000 Bitcoin revolving facility from crypto exchange FTX to help it manage its strained finances. But it is not the only firm impacted by 3AC’s meltdown.

Three Arrows insolvency sends ripples across crypto

Crypto lender BlockFi is also exposed to 3AC, having flagged a large liquidation earlier this week. The firm also received a $250 million bailout from FTX.

More recently, Maple Finance also said it faces pressure from a possible contagion of 3AC and another stressed crypto lender.

Fears over a 3AC insolvency have played a major role in bringing down crypto prices this month, as traders fear a mass dump of tokens from its liquidation.

With more than five years of experience covering global financial markets, Ambar intends to leverage this knowledge towards the rapidly expanding world of crypto and DeFi. His interest lies chiefly in finding how geopolitical developments can impact crypto markets, and what that could mean for your bitcoin holdings. When he isn't trawling through the web for the latest breaking news, you can find him playing videogames or watching Seinfeld reruns. You can reach him at [email protected]
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