Digital asset brokerage Voyager Digital has suspended client trading, deposits, withdrawals and loyalty rewards, according to a statement released Friday afternoon..
“This was an extremely difficult decision, but we believe it is the right one given the current market conditions,” said Stephen Ehrlich, CEO of Voyager Lending.
Ehrlich went on to say that the decision is intended to give the firm additional time to “continue to explore strategic alternatives with various stakeholders” and that they will provide additional information at “the appropriate time.”
Voyager’s announcement comes amid a spate of margin calls and defaults across the sector, making the digital broker the latest casualty of a widespread cryptocurrency market selloff. The two most widely traded cryptocurrencies, Bitcoin and Ether, are down more than 70% from their peaks last November, while the collapse of stablecoin UST in May sent shockwaves through an already troubled market.
The news comes just days after one of Voyager’s customers defaulted on a loan worth hundreds of millions of dollars, sparking growing fears that the insolvency could spread across the industry.
On Monday, the broker issued a notice that the famous crypto hedge fund Three Arrows Capital (3AC) defaulted on a loan worth more than $670 million. At the time, Voyager said it intended to continue with the post-3AC recovery, and in the meantime said it would continue to operate and process customer orders and withdrawals.
As of June 24, Voyager said it has about $137 million in USD and crypto assets. The company also noted that it has access to a $200 million credit facility in cash and USDC stablecoins, as well as a $15,000 bitcoin ($318 million) revolving credit facility from Alameda Ventures, which is the quantitative trading firm of FTX founder Sam Bankman – Frida.
Alameda last week funded Voyager with $500 million, and the firm has already drawn $75 million from that line of credit, but that doesn’t appear to have been enough to keep business as usual.
So far, investors in the world’s two largest cryptocurrencies by market capitalization don’t seem fazed by the news. Bitcoin was up about 2% and Ethereum was up more than 4% by the end of regular market hours on Wall Street.
Voyager is a rival to crypto-lending company BlockFi, which has also been at the center of the sector’s recent liquidity crisis. FTX just entered into a $680 million loan deal to acquire BlockFi, The Block reports.
Voyager’s decision follows that of popular crypto betting and lending platform Celsius, which similarly suspended all withdrawals, exchanges and transfers between accounts on June 13 due to “extreme market conditions.” Celsius has yet to announce clear guidance on next steps.
Voyager Digital suspends all bidding, deposits and withdrawals
Source link Voyager Digital suspends all bidding, deposits and withdrawals