Why Is Voyager Digitals Stock Down In June 2022? USDC & 3AC Debt Explained

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Despite a bleak winter, leading exchanges do not expect much improvement in market conditions. Inflation, monetary policy, and global recession are the major market headwinds.

On top of these more broad-based headwinds impacting the global financial markets, the collapse of TerraUSD (UST) and Terra LUNA has added to the crypto market woes. Regulators have found a new impetus to roll out more restrictive rules that could prove punitive to the crypto market.

Market share prices of publicly listed crypto exchanges have reflected investor sentiment towards the crypto market outlook.

Voyager Digital Shares Tumble 52.5% on News of a Possible Loan Default

On Wednesday, Voyager Digital Ltd. (VOYG), listed on the Toronto Stock Exchange (TSX), tumbled by 52.5%.

The extended sell-off saw VOYG slide to a new current-year low of C$0.55 before a partial recovery to close the day at C$0.76.

VOYG had slumped by 58% before the partial recovery. More significantly, VOYG was down 97% year-to-date.

While the crypto winter has taken a bite, the latest sell-off was in response to news of a possible loan default.

On Wednesday, Voyager Digital Ltd., owner of crypto exchange Voyager Digital issued a press release relating to its subsidiary Voyager Digital LLC.

According to the press release,

“Voyager Digital Holdings, Inc. (“VHD”) has entered into a definitive agreement with Alameda Ventures Ltd. (“Alameda”) related to the previously disclosed credit facility, which is intended to help Voyager meet customer liquidity needs during this dynamic period.”

The press release went on to say,

“VDH entered into a definitive agreement with Alameda for a US$200 million cash and USDC revolver and a 15,000 BTC revolver (the “Loan”).

In addition, the press release announced,

“Concurrently, Voyager 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.”

The press release added,

“Voyager exposure to 3AC consists of 15,250 BTC and $350 million USDC.”

Voyager Digital, LLC has requested payment of $25 million USDC by June 24 and repayment of the entire balance by June 27.

Founded in 2018, Voyager is a US cryptocurrency platform that supports the trading of more than 100 crypto assets. Its subsidiary, Coinify ApS enables Voyager to also offer crypto payment solutions for consumers and merchants globally.

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