Voyager Digital has become a new exchange amongst the list of cryptocurrency exchange firms halting user activities amidst the liquidity crisis caused by the ongoing crypto meltdown.
Voyager Digital Suspends Trades, Deposits, Withdrawals, and Rewards
Voyager Digital LLC, the operating platform of Toronto-listed Voyager Digital Ltd., said Friday it is temporarily suspending trading, deposits, withdrawals, and loyalty rewards, effective 2 p.m. EDT.
In prepared remarks, CEO Stephen Ehrlich stated that the difficult choice would allow the cryptocurrency firm to continue exploring strategic possibilities with multiple interested parties. Voyager also revealed that it had retained Moelis & Company and The Consello Group as financial consultants and Kirkland & Ellis LLP as legal advisors, hinting at a probable bankruptcy filing or sale.
Users can continue viewing market data on the Voyager app, but they cannot do anything more than that. The company will also send out reward payments for June and aims to continue paying out awards in July. Voyager did not say when it will reopen its doors to customers. Rather, it stated that it is "not in a position to say anything additional today" and that it "hopes to have more to offer shortly."
Voyager Digital Has Been Walking on a Tightrope Since 3AC Crash
The announcement comes only days after the crypto broker announced that it had issued a default notice to hedge fund Three Arrows Capital Ltd. Three Arrows borrowed $675 million from Voyager Digital in the form of 15,250 bitcoin and $350 million in USD Coin, a stablecoin with a dollar-pegged value.
Voyager recently revealed that 3AC had defaulted on the loan and that it was pursuing steps to collect its money. 3AC 15,250 Bitcoin and $350 million USDC were loaned by Voyager. Reports have been consistent in pointing out that the TerraUSD/LUNA crisis has had an impact on 3AC. The formerly dollar-based algorithmic stablecoin was pegged to the US dollar until early May when the peg failed. TerraUSD was linked to LUNA, causing a chain reaction.
Voyager is traded on the TSX in Toronto and the OTC Markets in the United States. While Canadian markets are closed today owing to a holiday, Voyager shares are now trading around $0.38. Voyager was worth over $12 at the start of 2022. Its 52-week high is more than $20. Markets appear to be pricing in Voyager's worst-case scenarios. Voyager stated that it is currently seeking all possible recovery options. Three Arrows Capital Ltd. was ordered liquidated by a British Virgin Islands court on Wednesday after creditors sued for failing to fulfill bills.
Throughout June's industry-wide crypto liquidity crisis, Voyager Digital has been fighting to retain solvency. It was earlier announced that Sam Bankman-Alameda Fried's Ventures had bought 22,681,260 common shares of Voyager, representing about 11.56 percent of the outstanding common and variable voting shares. This loan was meant to replace money provided by Three Arrows Capital, which defaulted on a $665 million loan earlier this week. Voyager said today that it is still working to collect 3AC's debt through the legal system in the British Virgin Islands.
Related Article : Crypto Hedge Fund Three Arrows Capital Defaults on its $670M in Loans
