Voyager Digital seems to have recovered. After Three Arrows Capital refused to repay a large loan, the company was faced with liquidity problems. We are now at the end of another chapter in the crypto-death spiral caused by Terra/ Luna. This time, who came to our rescue? Sam Bankman-Fried’s other company, Alameda Ventures. Does this guy bail out crypto? Or is he totally in control of the sector?
In the following: Press release, Voyager Digital announced that it “entered into a definitive agreement with Alameda Ventures Ltd. related to the previously disclosed credit facility, which is intended to help Voyager meet customer liquidity needs during this dynamic period.” That’s a way to put it. The company received “US$200 million cash and USDC revolver and a 15,000 BTC revolver.”
We announced today that we have reached a final agreement with Alameda Ventures regarding a 200 million dollars cash/USDC revolver, and a 15,000 BTC revolver.
Read today’s release: https://t.co/8wPfzcaI6K
— Voyager (@investvoyager) June 22, 2022
Yesterday, FTX was also acquired by BlockFi got $250M from Bankman Fried. The situation was described as follows at that time:
“Over the last few weeks, the crypto market has been trending down. Every company that offered cryptocurrency deposit yields like BlockFi or Celsius, and hedge funds such as Three Arrows Capital was affected by the contagion effects of Terra/ Luna’s extinction event. These companies’ problems and possible liquidation of assets, in turn, sent the crypto market into even more turmoil.”
This description describes the Voyager Case perfectly.
Sam Bankman-Fried’s Loan To Voyager, The Conditions
Rumours were already flying. On June 16th, analyst Dylan LeClair tweeted “Speculation here, but in its quarterly report, Voyager had loaned $320m to a singapore based entity named “counterparty b”. One has to wonder whether “counterparty b” was 3AC and if so, how much of a hit Voyager took?” The answer came quicker than anyone thought.
This is speculation. However, Voyager reported in its quarterly report that it had loaned $320m a singapore-based entity called “counterparty” b.
It is worth asking if “counterparty B” really was 3AC, and if it was, what kind of hit Voyager got? $VOYG shares are down 33% over the last two days… pic.twitter.com/sCiYskwLEq
— Dylan LeClair 🟠 (@DylanLeClair_) June 16, 2022
Voyager explained in a press release the details of the loan.
“As previously disclosed, the proceeds of the credit facility are intended to be used to safeguard customer assets in light of current market volatility and only if such use is needed. In addition to this facility, as of June 20, 2022, Voyager has approximately US$152 million cash and owned crypto assets on hand, as well as approximately US$20 million of cash that is restricted for the purchase of USDC.”
The loan comes with “certain conditions,” among them:
- “No more than US$75 million may be drawn down over any rolling 30-day period.”
- “The Company’s corporate debt must be limited to approximately 25 percent of customer assets on the platform, less US$500 million.”
- “Additional sources of funding must be secured within 12 months.”
Voyager Digital Price Chart on OTC Source: TradingView.com| Source: TradingView.com
It’s All About Three Arrows Capital Right Now
The press release confirms the rumors, the Singapore-based entity named “counterparty b” was 3AC. “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.” In a recent article, our sister site Bitcoinist broke down the hedge fund’s situation:
“The crypto fund had been directly in the crosshairs of the Luna crash with exposure of more than $200 million and speculated to be as high as $450 million. At first, the firm had appeared to bounce back from the Luna collapse but it would be soon obvious that 3AC was in a more perilous position than investors thought.”
It is even clearer when you consider the Voyager case. The company’s “exposure to 3AC consists of 15,250 BTC and $350 million USDC”. Alameda loans cover most of this. They did have to return some of their loan. Formally, “Alameda currently indirectly holds 22,681,260 common shares of Voyager (“Common Shares”), representing approximately 11.56% of the outstanding Common and Variable Voting Shares”. Voyager doesn’t have anything to worry about if everything is going well. But, what if it doesn’t?
Voyager lent 3AC 650million dollars from their customers, leaving them only with 150 million cash reserves.
Merrill Lynch: Who is responsible for risk management?
— Tyler (@ApeDurden) June 22, 2022
In any case, for those that like gossip, here’s the story as narrated by Voyager:
“The Company made an initial request for a repayment of $25 million USDC by June 24, 2022, and subsequently requested repayment of the entire balance of USDC and BTC by June 27, 2022. 3AC has not repaid these amounts and any failure to pay them by the specified date will be considered a default. Voyager intends to pursue recovery from 3AC and is in discussions with the Company’s advisors regarding the legal remedies available.”
The Answers and the Conclusions
It is a difficult time for the crypto industry. And there’s one question at the center of it, is Sam Bankman-Fried controlling the chaos or is he taking total control of the industry?
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