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Voyager Digital Shares Slump 60% After Announcing Possible 3AC Loan Default

Crypto broker Voyager Digital experienced a 60% slump in share price on Wednesday after announcing that beleaguered crypto hedge fund Three Arrows Capital may default on a $650 million loan.

Canada-based Voyager Digital announced that it could not assess how much Singapore-based 3AC, which recently faced margin calls from lenders BlockFi and Genesis, will be able to pay back. It requested 3AC to pay $25 million in USDC by June 24, 2022, and the balance of the USDC and the bitcoin by June 27, 2022.

The company noted that failing to meet either payment deadline will constitute a default and is discussing possible legal recourse with its advisors.

3AC rumored to be facing insolvency issues

Last Tuesday, 3AC CEO Zhu Su sent out a cryptic tweet seemingly to allay fears of liquidation after a Twitter user “MoonOverlord” noticed that Zhu and 3AC co-founder Kyle Davies hadn’t tweeted for several days. MoonOverlord also noticed that Zhu had deleted his Instagram account and had removed all cryptocurrency symbols from his Twitter bio except for bitcoin.

Three Arrows also withdrew 80,000 stETH, a derivative of ETH issued by Lido finance for staking ETH, from the DeFi platform AAVE. The company then swapped 38,900 worth of stETH for 36,700 ETH. Since the ratio of ETH to stETH is less than one to one, market pundits believed this was a sign of liquidity issues.

Zhu then tweeted that they were “fully committed” to working out issues without being specific.

The company had had its fingers burned after investing $559.6 million in the algorithmic stablecoin Terra, which collapsed with its sister token Luna early in May. A significant crypto selloff didn’t help matters.

Bankman-Fried extends a lifeline to crypto firms on the brink

Crypto lender BlockFi announced Tuesday the signing of a term sheet securing a $250 million revolving credit line from crypto
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