On Monday, June 27, Three Arrows Capital (3AC), the now under siege cryptocurrency hedge fund, received a notice of default from Voyager Digital.
Voyager Digital LLC, a subsidiary of Voyager Digital Ltd, is revealing its intention to pursue the recovery of 15,250 BTC (worth over $315 million) and $350 million USDC, cumulatively valued at over $660 million at press time.
The loan came with an ultimatum that 3AC was supposed to make payments on June 27. With the hedge fund illiquid, Voyager has met with its advisors to deliberate on the best legal actions to take.
Despite the huge debt, Voyager still has access to $200 million cash besides a USDC and a 15,000 BTC revolver from Alameda Ventures Ltd.
In the words of Stephen Ehrlich, Chief Executive Officer of Voyager:
We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands.
One such option is the $75 million credit provided by Alameda. It has been revealed that though significant, 3AC’s debt does not affect its loan from Alameda. As of June 24, Voyager had $137 million in cash and an assortment of liquid crypto assets.
Voyager Digital LLC
Voyager Digital LLC is a subsidiary of the U.S.-based Voyager Digital Ltd. It launched in 2018 to ensure transparency and cost-effective crypto transactions on its easy-to-use platform, where users can confidently and securely trade supported crypto assets.
Besides trading, the platform offers a global payment solution to merchants and retail customers via its subsidiary, Coinify ApS.
3AC’s predicaments follows the collapse of UST and LUNA, the failure to meet margin calls on its loans, and the massive crypto market downturn.
A tweet from Zhu Su, CEO of 3AC, on June 15, was an affirmation to the broader community that all was not well with the crypto hedge funds, raising concerns from clients and projects with exposure.
While fear of crypto funds folding or sinking into illiquidity, the reality of the situation started dawning as 3AC when it emerged that it couldn’t honor margin calls on the massive loans, said to be over $1 billion, it had taken from several crypto lending platforms, including BlockFi.
- defi general image: Photo by Shubham Dhage on Unsplash