Voyager Digital has announced that it is pausing all withdrawals, royalty rewards, and deposits following the liquidation of Crypto Hedge Fund, Three Arrows Capital (3AC). The company also said that the debit card issued to customers will stop working.
Voyager Digital had made a significant investment in the hedge fund which announced liquidation a few days back.
A British Virgin Islands court had ordered Three Arrows to go into liquidation, after which the firm had filed for a Chapter 15 bankruptcy.
CEO of Voyager Digital, Stephen Ehrlich, in a statement said that 3AC had failed to repay its loan of 15,250 BTC ($294 million) and $350 million USDC.
Ehrlich said that the firm has commenced activities that will ensure its recovery from the situation.
“This was a tremendously difficult decision, but we believe it is the right one given current market conditions,
“This decision gives us additional time to continue exploring strategic alternatives with various interested parties while preserving the value of the Voyager platform we have built together. We will provide additional information at the
appropriate time,” he noted.
Before 3AC’s liquidation, Voyager Digital had said it was considering issuing a default notice about its loan which 3AC had invested in now crashed Terra Luna token.
3AC was also, at a point accused of providing false information and exceeding the maximum amount of money it was allowed to manage.
The Monetary Association of Singapore (MAS), had issued a query to 3AC for breaching the limit on assets under management from July 2020 to September 2020, and from November
2020 to August 2021.
According to the MAS, Three Arrows had obtained a local registration in 2013 that allowed it to manage up to S$250 million ($180 million).
In a move aimed at safeguarding customers’ assets, Voyager had secured a revolving line of credit from Alameda Research a week ago.
The cash/USDC-based credit facility was aggregated at a principal amount of $200 million.
By the end of last month, Voyager claimed it currently has access to a $200 million credit line cash and stablecoins to add to the 15,000 Bitcoin gotten through its Partnership with Alameda