According to reports, TSX-listed Voyager Digital is another company that has been negatively impacted by financial issues linked to crypto hedge fund Three Arrows Capital (3AC). In a letter to investors, Voyager management announced that 3AC has potentially defaulted on a $655 million loan and it hopes to receive some of the funds by the end of this month.
Three Arrows Contagion: 3AC Owes Voyager Digital $655M — Management Sets Repayment Date
3AC’s financial difficulties have apparently started a contagion throughout the crypto industry, with some firms saying they are safe, while others are suffering from the fallout. For example, a company called Finblox backed by 3AC detailed It had to pause rewards (up to 90% APY) for all its users on June 16, and the platform also increased its withdrawal limits. This week, publicly traded crypto firm Voyager Digital announced that it is dealing with issues with 3AC.
In a letter sent to Voyager’s investors Wednesday, the company announced that it owed $655 million and that 3AC must repay the funds in bitcoin (BTC) and stablecoin usd tokens (USDC). According to the company, Voyager owes 15,250 BTC and 350 million USDC. The management said it originally wanted $25 million USDC to be paid out by June 24, but now it wants the full balance of USDC and BTC by June 27.
TSX-Listed Stock VOYG-T Loses Half Its Value in One Day — Voyager ‘Cannot Assess The Amount It Can Take Back At This Point’
The news did not bode well for Voyager investors, as the company’s shares tumbled 53% in a 24-hour period. Currently, TSX-listed stock VOYG-T is down 52% and is trading at $0.76 per unit. On June 21, VOYG-T changed hands for $1.60 per share, and in March 2021, VOYG-T hit an all-time high (ATH) of $32.68 per share. VOYG-T is currently more than 97% lower than ATH and the stock has been falling ever since the crypto markets’ value fell. The 3AC credit default announcement added another blow to the value of the company’s shares.
Discussing the initial USDC payment request and then the entire balance request, the letter says Voyager doesn’t know if it will be reimbursed. “None of these amounts have been repaid and [Three Arrows] Refunding the requested amount by these specified dates will constitute a case of default,” Voyager said. “[The company is] at this point it cannot assess the amount it can recover. Bitcoin.com News recently covered Three Arrows Capital, explaining how the company’s founders have remained silent about the situation.
3AC co-founder Kyle Davies explained to the Wall Street Journal (WSJ) that the Terra LUNA and UST fallout has damaged the company, and plans are in place to find a “fair solution” for all 3AC’s components. Also, 3AC is allegedly trying to trade GBTC arbitrage with many big-name investors a few days before the company’s collapse rumors. Finblox, Voyager and 3AC, as well as Mike Novogratz’s Galaxy Digital, have seen their shares drop significantly since the fallout from Terra LUNA and UST. Galaxy shares are down close to 90% from the stock’s highs in mid-November.
Novogratz remained silent for a while following the Terra debacle, but later issued a public apology regarding the matter, saying that the Galaxy had not suffered much from the Terra collapse. That’s because Novogratz says Galaxy adheres to a basic investment principle that includes only investing in what you’re comfortable losing. Since the letter, Novogratz has been a bit more active on social media, while many who have promoted or invested in Terra have kept quiet or dissociated themselves from the blockchain project.
What do you think of the problems Voyager Digital is facing with crypto hedge fund 3AC? Let us know what you think about it in the comments section below.
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