Clearly, Voyager Digital is out of the woods. When Three Arrows Capital failed to make huge loan payments to them, the company ran into liquidity problems. Welcome to another chapter in the crypto death spiral caused by the Terra/Luna crash. Who will come to the rescue this time? Alameda Ventures, another Sam Bankman-Fried firm. Is this guy saving cryptocurrencies or taking complete control of the industry?
in a recent press releases, Voyager Digital announced “a definitive agreement with Alameda Ventures Ltd. for a previously disclosed line of credit designed to help Voyager meet customer liquidity needs during this dynamic period.” That’s one way of saying it. The company received “$200 million in cash and USDC revolvers and 15,000 BTC revolvers.”
This morning, we announced a definitive agreement with Alameda Ventures for a $200 million cash/USDC revolver and a 15,000 BTC revolver.
Read today’s press release: https://t.co/8wPfzcaI6K
— Voyager (@investvoyager) June 22, 2022
As a reminder, FTX was discovered yesterday, also by Bankman-Fried to bail out BlockFi for $250M. At the time, we described the situation as follows:
“Cryptocurrency markets have been on a downward trend for the past few weeks. The contagion effect of the Terra/Luna extinction event shook every company out there, especially those depositing for cryptocurrencies like BlockFi and Celsius and hedge funds like Three Arrows Capital Companies that provide yield. The problems and possible liquidations of these companies, in turn, have thrown the crypto market into greater volatility.”
The Voyager case fits that description.
Loan from Sam Bankman-Fried to Voyager, conditional
Rumors have spread. On June 16, analyst Dylan LeClair tweeted: “There is speculation here, but in its quarterly report, Voyager lent $320 million to a Singaporean entity called “counterparty b”. One has to wonder Is “counterparty b” 3AC, and if so, how much has Voyager been hit?” The answer came sooner than anyone thought.
Speculation here, but in its quarterly report, Voyager lent $320 million to a Singaporean entity called “counterparty b.”
– Dylan LeClair 🟠 (@DylanLeClair_) June 16, 2022
Voyager explained the loan in a press release:
“As previously disclosed, given the current market volatility, proceeds from the line of credit are intended to be used to protect client assets and will only be used as needed. In addition to this facility, as of June 20, 2022, Voyager has on hand approximately $152 million in cash and own crypto assets, and about $20 million in cash are restricted from purchasing USDC.”
The loan comes with “certain conditions”, which include:
- “No more than $75 million may be withdrawn in any rolling 30-day period.”
- “The company’s corporate debt must be limited to around 25% of customer assets on the platform, below $500 million.”
- “Additional funding sources must be obtained within 12 months.”
Voyager Digital price chart on OTC | Source: TradingView.com
Now it’s Three Arrows Capital
The press release confirmed the rumours that the Singaporean entity named “counterparty b” was 3AC. “Voyager also announced that its operating subsidiary, Voyager Digital, LLC, may serve a notice of default to Three Arrows Capital (“3AC”) for failing to repay the loan.” In a recent article, our sister site Bitcoinists break down the hedge fund situation:
“The crypto fund was directly on target for the Luna debacle, with exposure of over $200 million and speculation as high as $450 million. At first, the company appeared to bounce back from the Luna debacle, but soon found 3AC in a much lower position than investors thought. more dangerous situation.”
Voyager’s case is even more pronounced. The company’s “exposure to 3AC includes 15,250 BTC and $350 million USDC.” So the Alameda loan covers most of it. However, what must they give in return? Officially, “Alameda currently indirectly holds 22,681,260 shares of Voyager’s common stock (“Common Shares”), representing approximately 11.56% of the outstanding common stock and variable voting shares”. If all goes well, Voyager will have nothing to worry about. But what if not?
Voyager used 3AC to fund its clients $650 million, leaving them with only $150 million in cash reserves.
Who’s responsible for the risk over there, Merrill?
— Taylor (@ApeDurden) June 22, 2022
Anyway, for those of you who like to gossip, here’s the tale told by Voyager:
“The company initially requested repayment of $25 million in USDC by June 24, 2022, and subsequently requested repayment of the entire balance in USDC and BTC by June 27, 2022. None of these payments have been repaid, and 3AC has failed to repay at these designations Repayment of any requested amount before the date will constitute an event of default. Voyager intends to recover from 3AC and is discussing available legal remedies with the company’s advisors.”
Answers and Conclusions
The entire crypto industry is in a precarious position. At the heart of the question is, is Sam Bankman-Fried reining in the chaos or taking full control of the industry?
Featured Image by Sebastian Herrmann on Unsplash | Charts by TradingView