Voyager Digital Secures Credit Line from Alameda, May Send Three Arrows a Notice of Default
Voyager Digital Holdings, an owner of a crypto platform, announced today that they entered into a multi-million credit line agreement with Alameda Ventures, but also that they may issue a notice of default to major crypto hedge fund Three Arrows Capital (3AC) for failure to repay its loan.
Alameda Ventures is a venture capital arm of Alameda Research, a quantitative trading firm and the parent company of the FTX exchange, the CEO of which, Sam Bankman-Fried has been making news over the past several days due to his opinion that the large crypto firms have a responsibility to help out in the time of the crypto market crisis.
Per Voyager’s announcement,
The company “entered into a definitive agreement with Alameda for a USD 200 million cash and USDC revolver and a BTC 15,000 (USD 304m) revolver.”
This confirms the deal reported today. It comes in addition to FTX providing the crypto lender BlockFi, which could be suffering from issues surrounding the 3AC and its possible insolvency, a “USD 250 million revolving credit facility” package. Typically, revolving credit facility arrangements involve an investor providing funds that can be drawn upon if and when they are needed.
Voyager stated that, as previously disclosed, the company intends to use the proceeds of the credit facility “to safeguard customer assets in light of current market volatility and only if such use is needed,” adding:
“In addition to this facility, as of June 20, 2022, Voyager has approximately USD 152 million cash and owned crypto assets on hand, as well as approximately USD 20 million of cash that is restricted for the purchase of USDC.”
Alameda currently indirectly holds an 11.56% stake in Voyager.
That’s not all Voyager had to share, as they stated that the operating subsidiary, Voyager Digital, LLC, may issue a notice of default to 3AC for failure to repay its loan. The company's exposure to 3AC consists of BTC 15,250 and USDC 350m.
Voyager Digital shares tanked following the news:
According to Voyager, they made an initial request for repayment of USDC 25m by June 24, and then subsequently asked for repayment of the entire balance of USDC and BTC by June 27 – neither of which has so far been repaid, they said. Failure by 3AC to repay these amounts by specified dates will “constitute an event of default,” said the company, adding:
“Voyager intends to pursue recovery from 3AC and is in discussions with the Company's advisors regarding the legal remedies available. The Company is unable to assess at this point the amount it will be able to recover from 3AC.”
Cryptonews.com has reached out to 3AC for comment.
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(Updated at 14:33 UTC: a chart with Voyager Digital stock price was added.)