The crypto lending platform, Voyager has suspended deposits, withdrawals, and loyalty rewards on its platform to get time to search out “strategic alternatives” after Three Arrows Capital’s (3AC) downfall.
Big names among the crypto firms are falling one after another. Voyager became the latest in this list of contagions influenced by venture capital firm Three Arrows Capital’s (3AC) downfall.
According to the recent tweet thread, Voyager is currently holding up more than $1.3 billion worth of crypto assets on its platform. This figure excluded the remaining claim of $650 million from 3AC.
Furthermore, Voyager disclosed that they have deposited $350 million of cash at Metropolitan Commercial Bank.
On July 1, Voyager Digital announced that it has temporarily suspended trading, deposits, withdrawals, and loyalty rewards.
“[Federal Deposit Insurance Corporation] insurance does not protect against the failure of Voyager, any act or omission of Voyager or its employees, or the loss in value of cryptocurrency or other assets,” the bank said in a statement on Sunday. “The standard FDIC insurance coverage amount is currently $250,000 per depositor for each account.”
Amid the crypto winter situation, many crypto firms are facing adversary effects on their platform such as liquidation, contagion and others. The fall in the crypto market intensified after the liquidation threat emerged on the 3AC.
A British Virgin Islands court released an order against 3AC and declared it bankrupt, while its founder Kyle Davies and Zhu Su are untraceable. Due to the 3AC crisis, numerous crypto firms including Babel Finance, Celsius, and others are falling into insolvency and liquidation.
“3AC’s investment ‘thesis’ could be easily described as ‘get in, take loans, hype and hope,’” Anna Becke, CEO of AI trading platform EndoTech told Blockworks in an email. “They bet on demi-frauds like Terra and took risky loans from other organizations (some of whom have since filed for bankruptcy), all with the veneer of a thesis-based hedge fund. 3AC represents the worst of crypto investing and is another reason crypto investors are shaken.”
Voyager allows its users to enjoy a 12% yield on their investment. The reason behind the temporary stoppage of the withdrawals follows the other lending platforms’ inability to payout those yields based on a shortage of industry capital and liquidity.
The company has not revealed when the service will be restored. However, Voyager indicated that it is “working quickly” to restore services and would provide an update “as soon as it becomes available.”
