Voyager Digital freezes trading, deposits, withdrawals and rewards, blames 3AC default


Crypto currency exchange Voyager Digital announced on Friday that it is temporarily suspending trading, deposits, withdrawals and loyalty rewards. “The failure of a borrower, Three Arrows Capital, to repay a large loan from us makes this the right way forward,” Stephen Ehrlich, CEO of Voyager Digital, said on Twitter shortly after the service suspension took effect.

“This decision, while far from optimal, will give us time to work to strengthen our balance sheet, a necessary condition for protecting assets and preserving the future of the Voyager platform we built together,” Ehrlich continued. Statement issued by the company said it hired Moelis & Co. and the Consellon Group as financial advisors, and Kirkland & Ellis as legal advisers.

Voyager Digital issued a notice of default to Three Arrows Capital, also known as 3AC, on Wednesday after the Singapore crypto hedge fund failed to repay a loan of 15,250 Bitcoin (BTC) and $ 350 million Coin (USDC). Voyager gave assurances at the time that it would continue operations. The exchange explained that it had accessed a $ 75 million revolving loan of 15,000 BTC, which it took from Alameda Research to cover its exposure to the loans, which 3AC was unable to repay. It also said it has $ 137 million in cash and crypto on hand.

Related: Singapore blames 3AC for proving false information

A court in the British Virgin Islands reportedly ordered the liquidation of 3AC shortly after Voyager Digital filed its notice of default. Reports surfaced on June 16 that 3AC did not meet margin calls that week.

Voyager Digital has not indicated when it will restore commercial, deposit, withdrawal and loyalty compensation services. Its announcement came the afternoon before a long weekend in the United States. Monday is U.S. Independence Day, which is a federal holiday.