Voyager Digital, a US cryptocurrency platform listed on the TSX under the ticker VOYG, experienced a significant decrease in its stock price by 53% on Wednesday. This drop was attributed to the announcement that hedge fund Three Arrows Capital may default on a loan of US$655 million that it had obtained. This news has caused concern among investors amidst the recent downturn in the cryptocurrency sector.
Voyager Digital, known for its platform that allows both retail and institutional investors to trade cryptocurrencies, had recently expanded its services to include offering loans to institutional borrowers. The company disclosed that it had provided a loan of US$655 million to Three Arrows, which included 15,250 bitcoins and US$350 million in USDC.
Following the disclosure, Voyager stated that it had requested repayment of US$25 million in USDC from Three Arrows by June 24, and the total amount of USDC and bitcoin by June 27. Failure to repay these amounts by the specified dates would constitute an event of default, according to Voyager.
In response to the liquidity issues arising from Three Arrows’ potential default, Voyager announced an agreement with Alameda Ventures to assist with customer liquidity needs. This agreement included a cash infusion of US$200 million, a USDC revolver, and a 15,000 BTC revolver loan. These measures were intended to protect customer assets amidst the current market volatility.
The cryptocurrency sector has been experiencing a prolonged downturn, with the price of bitcoin having dropped by 70% since its peak in November. Companies like Voyager and Galaxy Digital have been significantly impacted by these market conditions. Three Arrows Capital, the hedge fund facing potential default, has engaged legal and financial advisers to navigate the aftermath of heavy losses in the recent crypto sector collapse.
