Trading platform Voyager Digital has slashed its daily withdrawal limit to $10,000 from $25,000 following news of its exposure to struggling crypto hedge fund Three Arrows Capital.
Voyager announced the update to the withdrawal limit yesterday as the company’s share prices crashed by over 60%.
Voyager Digital, a publicly traded company, provides a crypto trading platform that includes a mobile app and debit card. Users are able to buy and sell over 100 different digital assets via the app.
But the New York-based firm said Wednesday that it had aggregated exposure of $661 million to Singapore-based Three Arrows Capital (3AC) in the form of stablecoins and Bitcoin. Voyager Digital lent money to 3AC but the firm may not be able to repay the loan.
Voyager said it may issue a “notice of default” to the hedge fund after it requested a repayment of $25 million in the stablecoin USDC by June 24 and a subsequent request of repayment of the entire amount in USDC and Bitcoin by June 27. As a consequence of its exposure to Three Arrows, Voyager may itself be at risk of going under, despite already receiving a $200 million bailout in the form of a line of credit from billionaire FTX CEO Sam Bankman-Fried.
Three Arrows Capital, also known as 3AC, is a Singapore-based crypto hedge fund that manages an estimated $10 billion in assets. But it’s in trouble: it’s currently at risk of going bankrupt after failing to repay several loans worth hundreds of millions, according to executives at various firms that are owed money.
Like a number of other firms in the space, 3AC is struggling due to the crypto crash. The price of just about every coin and token has plunged—hitting businesses that have liquidity in the form of digital assets hard.
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