TSX-listed Voyager Digital is reportedly another company negatively impacted by financial issues surrounding crypto hedge fund Three Arrows Capital (3AC). In a letter to investors, Voyager’s management said 3AC may have defaulted on a $655 million loan and hopes to receive some of the funds by the end of this month.
The contagion of the three arrows: 3AC owes Voyager Digital $655 million – management has set a repayment date
3AC’s financial woes appear to have sparked contagion across the crypto industry, and while a number of firms said they were safe, others said they were suffering the consequences. For example, a 3AC-backed company called Finblox detailed on June 16 that it had to pause bonuses (up to 90% APY) for all its users, and the platform also increased withdrawal limits. This week, publicly traded crypto company Voyager Digital uncovered it addressed issues related to 3AC.
In a letter sent to Voyager investors on Wednesday, the company announced that it owed $655 million and that 3AC was to repay the funds in bitcoin (Bitcoin) and the stablecoin USD coin (USDC). Voyager is owed 15,250 Bitcoin and 350 million USDC, according to the company. Management said it originally asked USDC to pay $25 million by June 24, but now it wants the full balance from USDC and Bitcoin until June 27th.
TSX-listed VOYG-T stock loses half of its value in one day – Voyager is “unable at this time to estimate the amount it may recover”
The news didn’t seem to go down too well with Voyager investors, with the company’s shares falling 53% in value in 24 hours. Currently, TSX-listed VOYG-T is down 52% and is trading at $0.76 per unit. On June 21, VOYG-T traded at $1.60 per share and in March 2021, VOYG-T hit an all-time high (ATH) at $32.68 per share. VOYG-T is currently more than 97% lower than the ATH and the stock has declined since the crypto markets plummeted. The announcement of 3AC’s loan default added another blow to the value of the company’s shares.
The letter, which discusses the initial USDC payment request and then the request for the full balance, states that Voyager does not know if it will be refunded. “None of these amounts have been repaid, and the failure of [Three Arrows] Repayment of any of the requested amounts by those specified dates constitutes an event of default,” Voyager said. “[The company is] It is not possible at this time to estimate the amount it may recover.” Bitcoin.com News recently reported on Three Arrows Capital and explained how the company’s founders have remained silent about the situation.
3AC co-founder Kyle Davies has disclosed this Wall Street Journal (WSJ) that the fallout of Terra LUNA and UST harmed the company and plans were made to find a “fair settlement” for all components of 3AC. In addition, a few days before the company’s alleged collapse, 3AC is said to have attempted to offer GBTC arbitrage trading to many well-known investors. In addition to Finblox, Voyager and 3AC, Mike Novogratz’s Galaxy Digital has also experienced a significant price drop since the fallout of Terra LUNA and UST. Galaxy shares are down nearly 90% from their mid-November highs.
Novogratz also remained silent for a while after the Terra fiasco, but then released a public apology on the matter, but said Galaxy didn’t suffer much from the Terra collapse. That’s because Novogratz said Galaxy adheres to a core tenet of investing, which involves only investing in what you’re willing to lose. Since the letter, Novogratz has been a little more active on social media, while many others who have funded or invested in Terra have remained silent or distanced themselves from the blockchain project.
What are your thoughts on Voyager Digital’s troubles with crypto hedge fund 3AC? Let us know what you think about this topic in the comment section below.
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