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HomeCrypto NewsMarketVoyager Looks To Tow The Same Path As Celsius, Halts Customer Withdrawals...

Voyager Looks To Tow The Same Path As Celsius, Halts Customer Withdrawals And Deposits

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Voyager Halts Customer Withdrawals And Deposits.



In a press release on Friday, Voyager reveals that it is halting customer trading, withdrawal, deposits, and loyalty rewards as it battles to find stability in the current crypto market environment.

Voyager CEO Stephen Ehrlich said:

“This was a tremendously difficult decision, but we believe it is the right one given current market conditions. This decision gives us additional time to continue exploring strategic alternatives with various interested parties while preserving the value of the Voyager platform we have built together. We will provide additional information at the appropriate time.”

It is worth noting that on June 27, Voyager disclosed that it had significant exposure to embattled crypto venture capital firm Three Arrow Capita (3AC). As a result, Voyager issued a default notice to 3AC, revealing that the firm had failed to make payments on loans of 15,250 BTC (approximately $294 million at the time of writing) and $350 million USDC. 

However, at the time, the crypto lender had maintained it would continue to conduct business as usual, noting significant lines of credit obtained from FTX founder Sam Bankman-Fried’s Alameda, totaling about $813 million.

Unfortunately, for Voyager investors, it appears that these have not been enough to stem the damage from the increasing contagion risk as the value of crypto-assets continues to drop. Notably, Voyager appears to be treading the same path as crypto lending protocol Celsius, which made risky bets on the LUNA ecosystem and got burnt.

Celsius, like Voyager, halted withdrawals on June 13 to get its house in order and meet debt and withdrawal obligations. However, the firm has yet to disclose a clear plan out of its bind. The latest reports reveal the firm may be looking at filing for bankruptcy as advised by its legal team as Goldman Sachs prepares to purchase its assets in that event.

BlockFi, a Voyager competitor, has also been impacted by the 3AC debacle as withdrawals surged due to panic about its exposure to the VC. However, the firm on Friday revealed that it had taken only a minor loss but has made a deal of up $680 million with FTX.US that could see FTX eventually acquiring the firm.

As the crypto market turbulence continues, pundits like FTX’s SBF, Binance’s CZ, and Pantera Capital’s Dan Morehead have maintained that more firms will collapse in the current market downturn.

Pantera Capital’s chief, in a letter to investors, attributes this to the excess leverage in the system. Several traditional finance analysts have compared this period in the crypto market to the dot-com bubble that saw several early internet startups collapse.

Notably, Voyager has enlisted the help of Moelis & Company and The Consello Group as financial advisors and Kirkland & Ellis LLP as legal advisors to guide it through this period. Additionally, it is worth noting that the company’s shares dropped by an additional 30% on Friday, trading at about $0.30.

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Ammara
Ammarahttps://thecryptobasic.com/
Ammara Mubin is a cryptocurrency reporter and trader with vast experience in the industry. Mubin has written several news stories related to the crypto industry, including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

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