By Nick Hedley
Cryptocurrency hedge fund Three Arrows Capital has defaulted
on a loan worth about $673 million.
The sell-off of digital assets continues to take its toll on
investors, with the price of bitcoin having fallen by around two-thirds since
November 12.
Voyager Digital, a U.S. cryptocurrency trading platform, said
in a statement on June 27 that it had issued a notice of default to Three
Arrows Capital for failure to make the required payments on its loan of 15,250 bitcoin
and $350 million USDC – a dollar-pegged “stablecoin.”“Voyager intends to pursue
recovery from Three Arrows Capital and is in discussions with the company's
advisors as to legal remedies available,” it said.
In the meantime, Voyager said its platform remained
operational. As of June 24, it had $137 million in cash and owned crypto assets
on hand. The company also has access to a $200 million cash and USDC revolving
facility, and a 15,000 bitcoin revolver, from Alameda Ventures. The Three
Arrows Capital default did not cause Voyager to default on its agreement with
Alameda.
"We are working diligently and expeditiously to
strengthen our balance sheet and pursuing options so we can continue to meet
customer liquidity demands," said Voyager CEO Stephen Ehrlich.
The company has engaged Moelis & Company as financial advisors.
Three Arrows Capital was established in 2012 by Su Zhu and
Kyle Davies.
Elsewhere in the industry, cryptocurrency lender Celsius
Network recently paused withdrawal, swap, and transfer functionalities.
“We want our community to know that our objective continues
to be stabilizing our liquidity and operations,” the company said in a
statement to users. “This process will take time.
“As has been a priority since our company’s inception, we maintain an open dialogue with regulators and officials. We plan to continue working with regulators and officials regarding this pause and our company’s determination to find a resolution.”
