Voyager, 3AC, BTC, USDC in loan; default- Everything unexpected
Many cryptocurrency-based firms have faced the wrath of a crypto meltdown that saw LUNA drop to zero. Interestingly, Three Arrows Capital (3AC), the beleaguered cryptocurrency firm tops the chart. In a WSJ report, the crypto hedge fund confirmed that it had suffered heavy losses in the recent market downturn.
Furthermore, the de-pegging of stETH from Ethereum’s [ETH] price, in the secondary market, also exposed the hedge fund to multiple margin calls. For which it did not have sufficient funding. This is the main reason why different crypto lenders are pursuing recovery measures against 3AC.
Consequently, the United States-based crypto brokerage Voyager Digital, in a 27 June press release, issued a notice of default to 3AC. The latter failed to make the required payments on its previously disclosed loan of 15,250 BTC and $350 million USDC. Hence, Voyager intends to pursue recovery from the accused.
Voyager Digital LLC has issued a notice of default to Three Arrows Capital for failure to make the required payments on its previously disclosed loan of 15,250 BTC and $350 million USDC. Voyager intends to pursue recovery from 3AC. — Wu Blockchain (@WuBlockchain) June 27, 2022
This notice comes within a week of the previous notice. Voyager Digital came out with a statement that the company had exposure worth some $500 million to Three Arrows Capital. It had requested repayment of $25 million in USDC by 24 June and the entire balance of USDC and BTC by 27 June.
However, neither of these amounts were repaid. And, the ‘failure by 3AC to repay either requested amount by these specified dates will constitute an event of default.’
In this regard, Stephen Ehrlich, the Chief Executive Officer of Voyager, opined,
“We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands.”
Nonetheless, given the hiccup, the firm continues to make use of the Alameda facilities to facilitate customer orders and withdrawals. As of 24 June, Voyager had approximately $137 million cash and owned crypto assets in hand. Moreover, the company had access to the previously announced $200 million cash, USDC revolver and a 15,000 BTC revolver from Alameda Ventures Ltd.
Notably, Voyager is likely to be the first of many firms in pursuing recovery measures against 3AC. Other crypto lenders, including BlockFi had liquidated their exposure to the firm after it failed to meet the margin call. Moreover, 3AC was held accountable for misappropriating customer funds to meet some of its margin calls. Now, over the course of the near future, the market can see more legal actions related to 3AC.Source