Voyager Digital Halts Deposits, Withdrawals On Platform Following 3AC Loan Default

It appears that the end of Voyager Digital (TSX: VOYG) is upon us. The crypto platform this afternoon formally announced that it is suspending all withdrawals, deposits, trading and loyalty rewards as of 2:00 PM EST today.

The development follows the formal announcement earlier this week that Three Arrows Capital, or 3AC, has defaulted on the loans provided by Voyager. Voyager had lent the crypto hedge fund 15,250 BTC, as well as $350 million USDC. Collectively, the crypto has a value of roughly $655 million, based on a bitcoin price of $20,000.

The announcement this afternoon was followed by the company disclosing just how bad its balance sheet currently is. Presently, the company has $1.1 billion in crypto assets loaned out, and $0.7 billion in deposits, with outstanding loans including those provided to 3AC. Collateral held meanwhile totals just $169.0 million, while cash held for customers sits at $356 million.

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In terms of exposure to 3AC, the 15,250 bitcoin loaned to the hedge fund accounts for roughly 70% of the total 21,796 bitcoin loaned. The hedge fund also accounts for 87% of the $402 million USDC loaned out.

Perhaps the most interesting aspect of the balance sheet details provided by the company, is that it appears that significant loans to Three Arrows Capital were made after March 31, 2022 as per filings.

As of March 31, Counterparty “B”, which today was revealed to be 3AC, accounted for $326.3 million in loaned out. As of June 30, that figure jumped to $654.2 million – indicating significant additional funds were provided to the firm.

Despite the recency of the loans, the hedge fund pays some of the lowest borrowing rates amidst all counterparties at 3% to 10%.

“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 CEO Stephen Ehrlich.

The suspension of all activities on Voyager’s platform is said to be temporary, however a defined timeframe for resumption was not provided. Nor did the company provide its current cash balance.

Voyager Digital last traded at $0.58 on the TSX.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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