Voyager Digital, a cryptocurrency exchange platform, has suspended all trades, deposits, and withdrawals after one notable borrower failed to pay back its debt.
According to Voyager CEO Stephen Ehrlich, a failed digital asset hedge fund’s inability to repay a “significant” debt forced the crypto exchange to halt trading operations.
“Today we made the difficult decision to temporarily suspend trading, deposits, withdrawals, and loyalty rewards. We have taken steps to avoid this outcome – including securing a credit facility from Alameda and lowering daily withdrawal limits. The failure of a borrower, Three Arrows Capital (3AC), to repay a substantial loan from us makes this the right path forward. 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.”
Following its default on the loan to Voyager last week, a British Virgin Islands court issued a liquidation order to Three Arrows Capital. According to Ehrlich, Voyager is looking for ways to recoup the money it lost to 3AC.
“Voyager is actively pursuing all available recovery options from 3AC, including the British Virgin Islands’ court-ordered liquidation procedure. We are looking into strategic options and having fruitful discussions with several parties. We expect to have more to offer soon.
According to a recent Bloomberg article, Three Arrows Capital has also recently filed for Chapter 15 bankruptcy in New York, protecting its US assets while the company is being liquidated in the British Virgin Islands.
