Ailing Crypto Trading Firm Three Arrows Capital Defaults On $675 Million Loan To Voyager Digital

Time has run out on the clock for Three Arrow Capital (3AC)’s loan from Toronto-based digital asset brokerage Voyager Digital.

The firm issued a notice of default this morning to 3AC after the ailing hedge fund failed to meet its loan deadline this morning. The brokerage’s exposure to 3AC consists of $350 million and 15,250 BTC, now totaling $675 million due to Bitcoin
BTC
reaching $21,215. It loaned the funds, largely made of customer deposits, to 3AC to generate income and pay the up to 12% interest fees it offers to customers.

The company initially requested a repayment of $25 million USDC
USDC
from 3AC by June 24 before subsequently requesting the entire USDC and BTC balance by today, June 27, last week.

As of this morning, Voyager still holds $137 million in cash and assets, according to a company statement. They also have access to $200 million in cash and USDC and 15,000 bitcoin credit line from Alameda Research, a quantitative trading firm launched by FTX CEO Sam Bankman-Fried. The company accessed $75 million of the funds and may “continue to make use of the Alameda facilities to facilitate customer orders and withdrawals, as needed,” per the statement.

Withdrawals on Voyager continue to be limited to $10,000 a day, down from $25,000 before the initial 3AC potential notice of default, and 20 transactions per 24 hour period, according to its website.

“We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands,” CEO of Voyager Stephen Ehrlich said in the statement.

Voyager’s
VO
price fell 60% last week after they first announced they may issue a notice of default to the Singapore-based hedge fund, who’s now had its positions liquidated this month after failing to meet margin calls across its investments. However the company’s stock opened at $0.71 this morning.

Voyager Digital intends to pursue recovery from 3AC and has also brought in investment firm Moelis
MC
as a financial advisor.