Technology

Crypto ‘shark’ on the verge of collapse, suspending all services


Digital asset broker Voyager Digital has announced that it is temporarily suspending all customer services including trading, depositing, payouts and withdrawals.

The announcement was made on the afternoon of July 1. CEO Stephen Ehrlich said it was “an extremely difficult decision” but had to be made in “current market conditions”.

The move was made to “buy more time” for the company to continue looking for “strategic alternatives with partners”.

Massive margin calls and forced asset liquidation across the industry have pushed digital asset brokerages to become the latest victims of the recent sell-off.

The two largest cryptocurrencies in the market, Bitcoin and Ether, have lost more than 70% of their value from their peaks last November. The collapse of the co-stable algorithms, which began with the UST crisis, triggered a “tsunami” in a market that was nascent and there was no shortage of chaos.

Speculation about Voyager’s possible default surfaced a few days ago, when one of the company’s VIP customers defaulted on hundreds of millions of dollars worth of borrowed assets.

At the beginning of the week, the brokerage firm announced that the popular crypto hedge fund Three Arrows Capital (3AC) was unable to meet its debt payment obligations for a loan of more than $670 million. At the time, Voyager said the company was operating as normal and was able to fulfill customer orders or withdraw funds.

As of June 24, the company said it was holding $137 million and other crypto assets. In addition, the company also has a credit line of $200 million in cash and USDC stablecoins, as well as the ability to borrow 15,000 Bitcoins ($318 million) of revolving credit from Alameda Ventures, the founder’s quantitative trading firm. setting up FTX exchange Sam Bankman-Fried.

Previously, Alameda also committed to financial support of 500 million USD for Voyager with 75 million USD already disbursed. Even so, this amount does not seem to be enough to save the crypto broker from the brink of collapse.

Voyager is a direct competitor of BlockFi, a crypto lender that has also been caught up in a recent liquidity crisis. It is reported that BlockFi has accepted to sell itself to FTX for $ 680 million.

Voyager’s decision is similar to that of other popular lending platform Celsius Network in mid-June. To date, Celsius has not released any further information on the next steps or the specific status of the company.

Vinh Ngo

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