Crypto exchange Voyager Digital is announcing a halt to all trading, deposits and withdrawals after a top borrower failed to repay debt.
Stephen Ehrlich, CEO of Voyager said that the crypto exchange had to halt trading activities due to the failure of a struggling digital asset hedge fund to repay a “substantial” loan.
“Today we have made the difficult decision to temporarily suspend transactions, deposits, withdrawals and loyalty rewards. We have taken steps to avoid this outcome, including obtaining a credit facility from Alameda and lowering daily withdrawal limits.
The inability of one borrower, Three Arrows Capital (3AC), to repay a large loan from us makes this the right way to go. This decision, although far from optimal, will allow us time to work on strengthening our balance sheet, a necessary condition to protect the assets and preserve the future of the Voyager platform that we have built together.
Three Arrows Capital was hit with a winding-up order from a court in the British Virgin Islands last week after defaulting on the Voyager loan. Ehrlich said Voyager is looking for ways to recover the capital he lost from 3AC.
“Voyager is actively pursuing all available remedies to recover from 3AC, including through the court-ordered liquidation process in the British Virgin Islands. We are exploring strategic alternatives and having productive conversations with various parties, and hope to have more to share in the near future.
Three Arrows Capital also recently filed for Chapter 15 bankruptcy in New York, a move that protects its US assets as the company faces liquidation in the British Virgin Islands, according to a new report from Bloomberg.
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Feature image: Shutterstock/Tithi Luadthong/Natalia Siiatovskaia