Apparently, Voyager Digital is out of the woods. The corporate bumped into liquidity points when Three Arrows Capital didn’t pay an enormous mortgage to them. Welcome to a different chapter of the crypto demise spiral brought on by the Terra/ Luna collapse. Who got here to the rescue this time? Sam Bankman-Fried’s different firm, Alameda Ventures. Is that this man bailing out crypto or is he taking whole management of the trade?
In a current press launch, Voyager Digital introduced that it “entered right into a definitive settlement with Alameda Ventures Ltd. associated to the beforehand disclosed credit score facility, which is meant to assist Voyager meet buyer liquidity wants throughout this dynamic interval.” That’s a method of placing it. The corporate obtained “US$200 million money and USDC revolver and a 15,000 BTC revolver.”
This morning, we introduced a definitive settlement with Alameda Ventures for a $200 million greenback money / USDC revolver and a 15,000 BTC revolver.
Learn at present’s launch: https://t.co/8wPfzcaI6K
— Voyager (@investvoyager) June 22, 2022
As a reminder, yesterday transpired that FTX, additionally owned by Bankman-Fried, bailed out BlockFi with $250M. On the time, we described the state of affairs as follows:
“Over the previous few weeks, the crypto market has been trending down. The contagion impact of the Terra/ Luna extinction occasion rocked each firm on the market, most of all those that supplied yield on cryptocurrency deposits like BlockFi and Celsius and hedge funds like Three Arrows Capital. These firms’ issues and doable liquidation of property, in flip, despatched the crypto market into much more turmoil.”
The Voyager case suits proper into that description.
Sam Bankman-Fried’s Mortgage To Voyager, The Situations
The rumors had been already flying. On June sixteenth, analyst Dylan LeClair tweeted “Hypothesis right here, however in its quarterly report, Voyager had loaned $320m to a singapore primarily based entity named “counterparty b”. One has to wonder if “counterparty b” was 3AC and in that case, how a lot of successful Voyager took?” The reply got here faster than anybody thought.
Hypothesis right here, however in its quarterly report, Voyager had loaned $320m to a singapore primarily based entity named “counterparty b”.
— Dylan LeClair 🟠 (@DylanLeClair_) June 16, 2022
Within the press launch, Voyager defined the mortgage:
“As beforehand disclosed, the proceeds of the credit score facility are supposed for use to safeguard buyer property in mild of present market volatility and provided that such use is required. Along with this facility, as of June 20, 2022, Voyager has roughly US$152 million money and owned crypto property available, in addition to roughly US$20 million of money that’s restricted for the acquisition of USDC.”
The mortgage comes with “sure situations,” amongst them:
- “Not more than US$75 million could also be drawn down over any rolling 30-day interval.”
- “The Firm’s company debt have to be restricted to roughly 25 % of buyer property on the platform, much less US$500 million.”
- “Extra sources of funding have to be secured inside 12 months.”
Voyager Digital worth chart on OTC | Supply: TradingView.com
It’s All About Three Arrows Capital Proper Now
The press launch confirms the rumors, the Singapore-based entity named “counterparty b” was 3AC. “Voyager concurrently introduced that its working subsidiary, Voyager Digital, LLC, might challenge a discover of default to Three Arrows Capital (“3AC”) for failure to repay its mortgage.” In a current article, our sister website Bitcoinist broke down the hedge fund’s state of affairs:
“The crypto fund had been straight within the crosshairs of the Luna crash with publicity of greater than $200 million and imagined to be as excessive as $450 million. At first, the agency had appeared to bounce again from the Luna collapse however it could be quickly apparent that 3AC was in a extra perilous place than buyers thought.”
The Voyager state of affairs makes it much more apparent. The corporate’s “publicity to 3AC consists of 15,250 BTC and $350 million USDC”. So, the Alameda mortgage covers most of it. What did they’ve to present in return, although? Formally, “Alameda at present not directly holds 22,681,260 frequent shares of Voyager (“Widespread Shares”), representing roughly 11.56% of the excellent Widespread and Variable Voting Shares”. If the whole lot goes effectively, Voyager has nothing to fret about. Nevertheless, what if it doesn’t?
Voyager levered 3AC up with 650million of their clients cash, leaving them with solely 150million money reserves.
Who tf is accountable for danger over there, Merrill Lynch?
— Tyler (@ApeDurden) June 22, 2022
In any case, for those who like gossip, right here’s the story as narrated by Voyager:
“The Firm made an preliminary request for a reimbursement of $25 million USDC by June 24, 2022, and subsequently requested reimbursement of all the stability of USDC and BTC by June 27, 2022. Neither of those quantities has been repaid, and failure by 3AC to repay both requested quantity by these specified dates will represent an occasion of default. Voyager intends to pursue restoration from 3AC and is in discussions with the Firm’s advisors relating to the authorized cures accessible.”
Solutions And Conclusions
The crypto trade as an entire is in a precarious state of affairs. And there’s one query on the middle of it, is Sam Bankman-Fried controlling the chaos or is he taking whole management of the trade?
Featured Picture by Sebastian Herrmann on Unsplash | Charts by TradingView