Voyager shares drop after warning about the crypto loss of Three Arrows

The Voyager Digital shares crashed by more than 60 percent on Wednesday, after the crypto broker announced that he could lose more than $ 650 million that he had borrowed from the ailing Hedge Arrows Arrows Capital.

The Voyager noted in Toronto said that she borrowed the StableCoin USDC together with 15,250 Bitcoin worth $ 350 million on Three Arrows, a crypto hedge fund that had failed to meet several lenders at the beginning of this month.

The revelations throw more light on the extent of the damage that the crisis on Three Arrows has caused, a Singapore fund that is known for its bullish long bets on crypto. Other crypto loans, including blockfi and genesis, also tried to repay their loans to the funds this month.

Three Arrows was hit by the broader downturn on the cryptoma markets, which has developed since the collapse of the StableCoin Terra in May in which the fund had strongly invested. Another crypto loan, Celsius Network, stopped the withdrawals this month.

Voyager offers small investors who deposit their crypto, rewards as well as a debit card and an app for trade in digital assets. In return, she promised to return to up to 12 percent. At the end of March, it gave crypto assets of $ 5.5 billion that had to be paid to customers.

These liabilities included StableCoin USDC worth $ 840 million and $ 33,000 Bitcoin units. A stable coin is a kind of cryptocurrency bound to assets such as the US dollar and acts as a bridge between existing financial markets and the crypto world.

Voyager said that Three Arrows asked for the repayment of the loan until the beginning of next week, but was "not able to assess the amount that it can get back".

The shares fell 61 percent in early trade and rated the company with only 150 million CAD ($ 116 million). The company's share has fallen 95 percent since its maximum stand in November 2021.

In the announcement, it was not mentioned whether Voyager held collateral for his loan on Three Arrows. Another statement declined.

At the beginning of this month, Voyager said that "it stands out through an uncomplicated, low -risk approach in lending and asset management by working with a selected group of serious counterparties". At that time, CEO Steven Ehrlich said that Voyager was "well capitalized and in a good position to survive this market cycle and to protect customer assets".

Voyager said that at the beginning of this week it was only $ 152 million of cash and crypto-assets, plus $ 20 million in cash that is limited to the purchase of USDC. The lender said on Wednesday that he had secured a credit line worth $ 200 million in cash and 15,000 in Bitcoin by Alameda Research, the trading company of the crypto-grand Sam Bankman-Fried.

The conditions of the credit line allow Voyager not to take more than $ 75 million over a period of 30 days. Bankman-Frieds FTX crypto exchange also submitted a loan of $ 250 million to blockfi this week.

Only last month, Three Arrows Capital and Alameda took part in a private placement of Voyager shares, which brought in $ 58 million. Alameda currently has 11 percent of the company, said Voyager on Wednesday.

The latest quarterly market update from Voyager showed that four opponents made 79 percent of the $ 2 billion credit book by the end of March. The two best made up more than half of the exposure.