TSX Listed crypto broker Voyager Digital is facing a default of $660 million from crypto hedge fund Three Arrows Capital.

Voyager Digital (TSE: VOYG) is reeling from the potential $660 million default on its exposure to crypto hedge fund Three Arrows Capital Ltd comprising 15,250 Bitcoin and $350 million of stablecoin USDC. In a move likely to further dampen the already battered sentiment in the crypto market, the company announced Thursday it was lowering its daily withdrawal limits to $10,000 from $25,000. (Reuters)

It also revealed Wednesday that it may have to issue a default notice to Three Arrows for failure to repay its loan. Shares fell 51% in Toronto trading after the notice became public.

Liquidity lifelines

Voyager’s move to curtail withdrawals comes even though it managed to secure credit lines of $200 million in cash and USDC stablecoin plus another 15,000 bitcoin from the investment arm of Sam Bankman-Fried owned Alameda Research LLC.

It appears that liquidity pressures are threatening to swamp these loan lifelines to the crypto broker, even though it reported $5.8 billion of platform assets in March.

According to analysts cited by Bloomberg, the company’s survival would hinge on the pace of the withdrawals demanded by its panicked customers, and the extent of recovery from Three Arrows.

“Voyager intends to pursue recovery from 3AC and is in discussions with the Company’s advisors regarding the legal remedies available,” Voyager said. “The Company is unable to assess at this point the amount it will be able to recover from 3AC.”

Related Story: Celsius Bars Withdrawals; Cryptos Melt; Bitcoin Crashes