The cryptocurrency exchange filed a notice of defaulting to Singapore-based Three Arrows Capital earlier in the week but assured it would continue operations.
Cryptocurrency exchange Voyager Digital declared Friday that it was provisionally suspending trading, deposits, withdrawals, and loyalty rewards. “The failure of a borrower, Three Arrows Capital, to repay a substantial loan from us makes this the right path forward,” Voyager Digital CEO Stephen Ehrlich tweeted after the service suspension went into effect.
Ehrlich continued, “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,” A declaration issued by the company claimed it has involved Moelis & Co. and the Consello Group as financial advisers, and Kirkland & Ellis as legal advisers.
Voyager Digital dispensed a notice of default to Three Arrows Capital, also known as 3AC, on Wednesday after the Singapore Crypto Hedge fund failed to pay back a 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) loan. However, Voyager gave assurances at the time that it would continue operations. The exchange clarified that it had retrieved $75 million of a revolving loan of 15,000 BTC it had taken out from Alameda Research to cover its exposure to the loans 3AC was unable to pay back. It also claimed it had $137 million in cash and crypto on hand.
As the report said, a court in the British Virgin Islands ordered the liquidation of 3AC shortly after Voyager Digital filed its notice of default. Reports appeared on June 16 that 3AC had failed to meet margin calls that week.
Voyager Digital did not specify when it would bring back trading, deposit, withdrawal, and loyalty reward services. Its declaration came in the afternoon before a long weekend in the United States. Monday is U.S. Independence Day, which is a federal holiday.
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