Cryptocurrency exchange Voyager Digital announced Friday that it will temporarily suspend trading, deposits, withdrawals and loyalty rewards. “The failure of the borrower, Three Arrows Capital, to repay a significant loan from us makes this the right path forward,” Stephen Ehrlich, CEO of Voyager Digital, said on Twitter shortly after the service suspension went into effect.
“While this decision is far from optimal, it will give us time to work on strengthening our balance sheet, a necessary condition for protecting assets and preserving the future of the Voyager platform we built together,” Ehrlich continued. A statement issued by the company stated that it had appointed Moelis & Co. and Consello Group as financial advisors, and Kirkland & Ellis as legal advisors.
Voyager Digital issued a default notice to Three Arrows Capital, also known as 3AC, on Wednesday after a Singapore hedge fund failed to repay a loan of 15,250 bitcoin (BTC) and $350 million (USDC). Voyager gave assurances at the time that it would continue its operations. The exchange explained that it had secured $75 million in a revolving loan of 15,000 BTC that it had taken from Alameda Research to cover its exposure to loans that 3AC was unable to repay. She also said she had $137 million in cash and crypto on hand.
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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 had failed to meet margin calls that week.
Voyager Digital has not indicated when it will restore trading, deposit, withdrawal, and loyalty bonus services. Her announcement came in the afternoon before a long weekend in the US. Monday is American Independence Day, which is a federal holiday.