Crypto Lending Firm Three Arrows Capital Gets Notice; $650M Debt

Paigambar Mohan Raj
Source: Coingape

The troubles of crypto lending firm Three Arrows Capital don’t seem to cease. After rumors were floating on the internet, Three Arrows Capital (3AC) was served with a default notice by Voyager Digital. The notice is regarding failing to repay a debt totaling more than $650 million. Voyager Digital is a crypto application claiming up to 12% profits.

The official announcement was made on Monday. Per the statement, 3AC has a debt of 15,250 BTC (Bitcoin worth $325 million) and 350 USDC to Voyager Digital. Voyager Digital has said that it is still in business. The firm is still fulfilling customer orders and withdrawals. This is in contrast to some other crypto exchanges that were exposed to 3AC and had to shut withdrawals.

Voyager has accessed $75 million of the credit line it had set up with Alameda Research. The firm has said that it may use more if needed.

Voyager Digital’s CEO Stephen Ehrlich said in a statement,

“We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands.”

The Company has hired Moelis & Company to serve as financial consultants during this process.

This month, investments held by Singapore-based 3AC were liquidated because they could not fulfill margin requirements. Su Zhu and Kyle Davies, former classmates, formed the crypto fund in 2012. As a result of the Terra crypto ecosystem’s and its native token’s (Luna) collapse last month, the firm is now facing huge losses.

Davies said that Three Arrows Capital had hired legal and financial advisers to find a solution for its investors and lenders after suffering significant losses as a result of a global market selloff in digital assets.

Davies claims that Three Arrows Capital is investigating options, including asset sales and being saved by another company. The fund tries to strike a deal with its creditors to buy more time to devise a plan. The business is still running while searching for a solution.

However, there has been no word as to where that plan stands. Moreover, Zhu has been surprisingly silent during this period of uncertainty. His last Tweet was published on the 15th of June.

3AC was one of many firms affected by the demise of the Terra (LUNA) blockchain. It goes to show how vulnerable many of the current systems were. However, it also provides valuable lessons for future firms, investors, and projects.