Crypto exchange platform Voyager Digital is announcing a halt on all trades, deposits and withdrawals after one prominent borrower failed to repay its debt.
Voyager CEO Stephen Ehrlich says that the crypto exchange had to stop trading activities due to the failure of an embattled digital asset hedge fund to pay back a “substantial” loan.
“Today we made the difficult decision to temporarily suspend trading, deposits, withdrawals, and loyalty rewards. We have taken steps to avoid this outcome – including securing a credit facility from Alameda and lowering daily withdrawal limits.
The failure of a borrower, Three Arrows Capital (3AC), to repay a substantial loan from us makes this the right path forward. This decision, while far from optimal, will give us time to work to strengthen our balance sheet, a necessary condition to protect assets and preserve the future of the Voyager platform we have built together.”
Last week, Three Arrows Capital was hit with a liquidating order from a court in the British Virgin Islands after defaulting on Voyager’s loan. Ehrlich says Voyager is looking for ways to recover the capital it lost from 3AC.
“Voyager is actively pursuing all available remedies for recovery 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 has also recently filed for Chapter 15 bankruptcy in New York, a move that protects its US assets while the firm faces liquidation in the British Virgin Islands, according to a new report by Bloomberg.
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Featured Image: Shutterstock/Tithi Luadthong/Natalia Siiatovskaia
