Voyager Halts Withdrawals, Trading, and Deposits
- Voyager suffered huge losses from its exposure to 3AC.
- The platform recently reduced its daily withdrawal by 25%.
Voyager, a digital asset broker announced in a statement that it had halted all customer loyalty rewards, trading, deposits, and withdrawals. The lending platform had recently issued 3AC or Three Arrows Capital a default notice after it failed to make payments.
The platform’s CEO, Stephen Ehrlich said of its latest move in a press statement,
This was a tremendously difficult decision, but we believe it is the right one given current market conditions. This decision gives us additional time to continue exploring strategic alternatives with various interested parties while preserving the value of the Voyager platform we have built together. We will provide additional information at the appropriate time.
Voyager’s statement coincides with a flurry of margin calls and defaults across the industry, making it a recent victim of the general crypto market pullback. The market remains volatile as both Ethereum and Bitcoin are struggling for stability. The two cryptocurrencies are miles away from their previous peak in November 2021. Furthermore, Terra’s collapse in May further worsened what has been a catastrophic season for the market.
Voyager reportedly lent clearly insolvent 3AC 15,250 Bitcoin, presently worth $296.1 million, as well as $350 million in USDC stablecoins. 3AC’s decline led a British Virgin Island court to order the hedge fund to pay off debts and other commitments.
The Present Fight for Survival in the Crypto Space
Voyager had recently moved to cut down its daily withdrawal limit by more than 50%. This would mean each customer would only withdraw $10,000 instead of $25,000. Voyager has also seen a recent decline in its stock but the firm is in a fight for survival.
Voyager’s rival, BlockFi, a company that specializes in lending has also recently experienced a shortage of liquidity. BlockFi will now be purchased by FTX under a $680 million credit agreement.
There’s been an intense fight for survival among crypto platforms. Most of these firms are preparing to pack up while others are seeking alternatives such as cutting down their workforce. Top platforms such as Crypto.com have announced a layoff of about 5% of their employees. The firm said it adopted this approach to secure its future amidst the bear market.
Bitpanda, another exchange fighting to stay afloat now has a workforce of about 700 people left which is a decline from its former workforce of over 1,000. The firm also withdrew a handful of employment offers in an attempt to manage its present financial problems.
According to experts, many of these companies might be compelled to scale back their operations to the absolute bare minimum or, even shut down if the bear market persists for several months. Most crypto exchanges are blaming reduced trading volumes and investors’ funds for their current struggles. Crypto enthusiasts all hope to see the market gradually return to its former glory.