Voyager is facing quite the challenge thanks to its exposure to Three Arrows Capital. But how bad is it really?
- Voyager Admits Exposure To Three Arrows Capital
- Future Prospects For Voyager; Chances Of Survival
Voyager Admits Exposure To Three Arrows Capital
Voyager Exchange released a market update today centered around the agreement it made with the Sam Bankman-Fried-led Alamada Research. Alameda agreed to provide $200 million USD in cash, as well as a revolver (credit line) for both USDC and BTC. The revolver for BTC is for 15,000 bitcoin.
Hidden away in the release was the admission that Voyager had exposure to Three Arrows Capital, the crypto investing firm that is rumored to be insolvent.
“Voyager concurrently announced that its operating subsidiary, Voyager Digital, LLC, may issue a notice of default to Three Arrows Capital (“3AC”) for failure to repay its loan. Voyager’s exposure to 3AC consists of 15,250 BTC and $350 million USDC,” Voyager said via release. Shares of Voyager are down 60% on the announcement. It’s currently trading in the $0.70 cent range.
The news of its exposure to Three Arrows comes after Voyager CEO Stephen Ehrlich announced that the exchange no longer had any Celsius left on its books.
Voyager also said they requested a 25 million payment from Three Arrows by June 24th as well as the entire balance by June 27th. “The Company is unable to assess at this point the amount it will be able to recover from 3AC,” Voyager added.
This begs the question: can Voyager survive this?
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Future Prospects For Voyager; Chances Of Survival
“We take risk management very seriously, and safeguarding customer assets is our number one priority. We have never engaged in DeFi Lending activities and have no exposure to stETH”
This is an outright lie by Voyager. https://t.co/XsID4tfwVt pic.twitter.com/hGX9h9czme
— K A L E O (@CryptoKaleo) June 22, 2022
It’s a fair question considering what’s going on with Celsius and Three Arrows Capital. Unlike those two, it appears Voyager has some friends in important places.
The aforementioned revolver they received means they only have to pay a monthly payment back to Alameda. Not so coincidentally, the revolver of 15k bitcoin is eerily similar to the 15,200 bitcoin Voyager loaned out to Three Arrows.
Not to mention, Voyager still has $150 million USD cash on hand.
So for now, it appears Voyager has the financial wherewithal to handle its very large exposure regardless of what amount they are able to get back. Remains to be seen what else is on Voyager’s books, but it appears that as long as Sam Bankman-Fried doesn’t lose the shirt off his back they’ll be just fine.
“I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion,” Bankman-Fried told NPR recently.
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