Voyager Digital Halts Crypto Trading, Deposits, and Withdrawals

On Friday of last week, cryptocurrency brokerage business Voyager Digital made the announcement that it has temporarily halted all customer trading as well as deposits, withdrawals, and loyalty awards.

“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,” said Stephen Ehrlich, CEO of lending firm Voyager Digital.

Voyager has been experiencing significant financial difficulties, which have had a negative impact on the company's operations. The lending company disclosed on the 22nd of June that it had a significant exposure to the cryptocurrency hedge fund firm Three Arrows Capital (3AC). The crypto hedge fund that is having financial difficulties received a notice of default from Voyager last week for failing to repay its loans.

The total amount of the loans came to approximately $665 million and was comprised of 15,250 BTC, which is equivalent to $294 million, and $350 million in USDC. Voyager stated that it had demanded that Three Arrows Capital reimburse $25 million in USDC by the 24th of June, and that it should repay the entire remaining debt in USDC and BTC by the 27th of June.

Voyager has declared plans to pursue all measures to collect its funds from the crypto hedge fund firm 3AC, including through a court-ordered liquidation procedure in the British Virgin Islands. These preparations were made public in light of the fact that 3AC has failed on its obligations.

Voyager has recently secured over $500 million in loans from Alameda Research, a quantitative trading firm owned by FTX boss Sam Bankman-Fried, in order to mitigate its $665 million exposure and weather the crypto winter. The loans come in the form of $200 million in USDC and $294 million worth 15,000 BTC, respectively.

To this point, Voyager has been granted access to the $75 million portion of the FTX loan; nevertheless, it appears that this sum is not sufficient to ensure that the company can continue to conduct business as usual. The company eagerly anticipates gaining access to further funding at the earliest opportunity.

The Precarious State of the Crypto Market

The continuing decline in value of cryptocurrencies has placed a number of market participants in this industry in a precarious financial position.

Bitcoin and other cryptocurrencies have suffered significant losses as the market adjusts to the new reality brought about by the Federal Reserve's decision to raise interest rates and the failure of the TerraUSD stablecoin and Luna, which was TerraUSD's sister cryptocurrency.

The cryptocurrency lending platform Celsius halted all account withdrawals on June 12, claiming “extreme market conditions” as the reason. After the collapse of TerraUSD, it was reported that Celsius had spent hundreds of millions of dollars in an illiquid token derivative known as Staked ether, also known as stETH. This coin was another problematic cryptocurrency that caused damage to the digital asset market.

BlockFi, a renowned cryptocurrency lending company, has also been going through some tough financial times as a result of the considerable exposure it has to Three Arrows Capital. The cryptocurrency lender had just made a major announcement on employment losses, and it also disclosed that its valuation had dropped substantially from $5 billion to $1 billion. In order to save its company, BlockFi was able to obtain a revolving line of credit from FTX in the amount of $250 million last week.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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