- Voyager Digital has started processing some withdrawals
- Users who requested their withdrawal prior to July 1st will get their money
- This is likely just a legal necessity, with the company still needing $650 million to survive
Voyager Digital is allowing some customers to get their funds off its platform as it still pursues “strategic alternatives” to survive. An email sent to Voyager Digital customers informed them it was working its way through withdrawals that had been submitted before it announced it was halting operations on July 1st, meaning that a lucky few will be able to salvage their holdings. However, the move looks to be simply a legal box ticking exercise and doesn’t reflect any perceived increase in the chances of survival.
Voyager Digital Has $650 Million+ Three Arrows Exposure
Voyager has been publicly dealing with the crypto credit crunch since mid-June when it took out a $200 million and 15,000 BTC revolving line of credit with Alameda Research, which it said was to “better serve and protect our customers in current market conditions”. Despite the attempted assurances, the news that Voyager Digital was borrowing such a large sum of money didn’t sit well with many, with one responder on Twitter saying that the move “reeks of panic”.
This was proved correct when Voyager Digital suspended withdrawals on Friday, also knocking out the ability for Voyager Digital debit card holders to use their cards. The need to halt withdrawals was put down to a $650 million + exposure to Three Arrows Capital, which was again referenced in a tweet thread posted on Sunday where the company reiterated that it was still seeing “strategic alternatives” to prevent complete closure:
There is nothing more critical to us than our customers. Please know that we are focused on protecting assets and maximizing value for all customers as quickly as possible. (1/3)
— Voyager (@investvoyager) July 3, 2022
Withdrawal Honouring is Legal Measure
In all the darkness however there is a glimmer of light, as Voyager Digital users who had the good fortune to request their withdrawals before the July 1st suspension would be receiving their money:
Well well well…things are moving. Far from perfect but I’ll take the little wins. pic.twitter.com/93bZWe3P5p
— Digital Asset News (@NewsAsset) July 4, 2022
No doubt this was a legally enforced move, with the company’s recently hired legal team advising them that they had an obligation to pay out these customers, and in fact it offers very little hope that anything more than this is on the horizon. With Three Arrows Capital filing for bankruptcy, there will now be a huge queue forming to get their hands on what, if anything, Three Arrows has left.
While Voyager Digital may have $1.8 billion worth of assets on its books, if this can’t cover the value of the assets deposited by investors and the company can’t get a new line of credit, which, at a valuation of over $650 million seems unlikely at this stage of the crypto market, then bankruptcy seems to be the only option left for Voyager Digital too.