Three Arrows Capital has allegedly failed to make required payments on its loans from Voyager

Voyager Digital (TSE: VOYG) announced today that its operating subsidiary, Voyager Digital LLC, had issued a notice of default to Three Arrows Capital for failure to make the required payments on its loan of 15,250 BTC and $350 million USDC. (Voyager)

Three Arrows Capital has run into liquidity issues after the relentless decline in the crypto market and the collapse of stablecoin TerraUSD/Luna. It has reportedly also been facing margin calls. The hedge fund had a deadline today to repay over $670 million in loans.

The crypto market has already been reeling from withdrawal suspensions at Celsius Network, job cuts, and a hugely negative macroeconomic environment including rate hikes and record inflation.

A default at Three Arrows Capital (3AC) could have a further ripple (contagion?) effect because of the fund’s huge leveraged positions and prominence in the crypto market.

“Voyager intends to pursue recovery from 3AC and is in discussions with the Company’s advisors as to legal remedies available,” the company said.

To tide over the crisis, the company has arranged a line of credit in the form of a US$200 million cash and USDC revolver and a 15,000 BTC revolver from Alameda Ventures Ltd, an affiliate of Sam Bankman-Fried.

It said it had approximately US$137 million cash and owned crypto assets on hand as of June 24, 2022.

“The Company has accessed US$75 million of the line of credit made available by Alameda and may continue to make use of the Alameda facilities to facilitate customer orders and withdrawals, as needed,” Voyager said. “The default of 3AC does not cause a default in the agreement with Alameda.”

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