Voyager Digital Draws Down $75 million from the Alameda Revolver and Issues 3AC a Notice of Default
- Voyager Digital sends a notice of default to 3AC and withdraws $75 million from the Alameda Revolver.
- Following the disclosure of its exposure to Three Arrows Capital last week, the cryptocurrency exchange’s stock price fell sharply.
The notice of default sent to 3AC marks the beginning of the end for the hedge fund, which has been struggling to repay its loans. If 3AC fails to make the required payments, Voyager will begin liquidating the collateral it holds to recoup its losses.
Voyager’s decision to draw down $75 million from its credit line shows that the company is feeling the squeeze from 3AC’s inability to repay its debts. The move also indicates that Voyager is confident it will be able to find buyers for 3AC’s assets at a price that will allow it to recover its loan amount in full.
We are working carefully and quickly to enhance our balance sheet and pursue solutions so we can continue to satisfy client liquidity demands.
Voyager CEO, Stephen Ehrlich.
This situation is yet another example of the risks associated with lending money to highly leveraged firms in the crypto space. While Voyager will likely come out of this ordeal unscathed, other lenders may not be so lucky.
Voyager, a digital asset broker, has issued a default notice to 3AC Co. and drawn down $75 million from its revolver with Alameda Research. The move comes as the company looks to shore up its finances in the face of market volatility.
In addition to the default notice, Voyager has retained investment banker Moelis & Company as financial advisor. This is likely in preparation for a possible sale of the company or restructuring of its debt.
The news of Voyager’s exposure to 3AC came as a shock to many investors, given the company’s previous assurances that it had no such exposure. The sharp decline in the price of cryptocurrencies has taken a toll on many companies in the space, and Voyager is now among them.
Last week’s sell-off was brutal and sent shockwaves through the entire market. Many investors are wondering if this is the beginning of the end for cryptocurrency investing. Only time will tell, but for now, it seems that the party is over and reality is setting in.
Barry Pene is a stern blockchain research/copywriter. Barry has been trading cryptos since 2017 and has been invested in issues that would put the blockchain industry on the right pedestal. Barry's research expertise cuts across blockchain as a disruptive technology, DeFis, NFTs, Web3, and reduction of energy consumption levels of cryptocurrency mining.
