Voyager Digital, a crypto app offering up to 12% returns, said it intends to pursue Three Arrows Capital for failure to repay a loan worth more than $650 million.
The crypto platform may issue a notice of default to Three Arrows Capital, the crypto hedge fund known as 3AC, according to a statement on Wednesday. Voyager's exposure to 3AC consists of 15,250 BTC ($312 million) and 350 million USDC.
Voyager shares, which are listed in Toronto, fell 43% at 9:47 a.m. ET on Wednesday following the announcement.
Singapore-based 3AC had its positions liquidated this month after it failed to meet margin calls. The fund, which was founded in 2012 by former classmates Su Zhu and Kyle Davies, faces significant losses following last month's collapse of the Terra ecosystem and its native luna token. Davies told The Wall Street Journal last week that the firm is "hoping to reach an agreement with creditors that would give it more time to work out a plan."
Voyager has made an initial request for a repayment of 25 million USDC by June 24 and subsequently requested repayment of the entire balance by June 27.
Neither of these amounts has been repaid and failure to repay either requested amount by these dates will constitute a default, according to Voyager. Voyager is in discussions with its advisors regarding the legal remedies available — although it's unclear how much it will be able to recover. 3AC didn't immediately respond to a request for comment from The Block.
Last week, Voyager announced it had secured a loan from Alameda Ventures "to safeguard customer assets in light of current market volatility." Alameda will provide a $200 million cash and USD Coin (USDC) revolver and a 15,000 BTC ($300 million) revolver. The credit line will only be used if it's needed, Voyager said.
Story updated to show that Alameda's loan was announced last week. Updated a second time to add the decline in Voyager's shares.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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