Three Arrows Capital default: Voyager to pursue 3AC if loans are unpaid

Voyager is also discussing what legal action it could take to recover the funds from 3AC

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A subsidiary of Voyager Digital may issue a default notice to Three Arrows Capital if it fails to repay its loans – Photo: Getty Images
                                

A subsidiary of Voyager Digital, a US-based cryptocurrency platform, may issue a default notice to Three Arrows Capital (3AC) if the crypto hedge fund fails to repay its loans.

Voyager said it loaned to 3AC 15,250 Bitcoin (BTC), which is worth just over $310m (£253m), and $350m (£286m) USD Coin (USDC), Reuters has reported.

Initially, Voyager asked 3AC for the repayment of $25m (£20m) in USDC by 24 June and then later requested the entire amount to be repaid by 27 June, but Voyager has not received payment thus far.

Voyager is also discussing what legal action it could take to recover the funds from 3AC.  

3AC turned to another firm for a bailout  

It is thought that 3AC is exploring options on how to deal with liquidating its positions, such as a sale of its assets and a bailout from another firm, the Wall Street Journal has reported.  

Three Arrows Capital did not respond to Currency.com’s request for a comment.  

The collapse of LUNA played a part

According to the Twitter account for The Defi Edge, 3AC had also spent $559m (£458m) buying locked LUNA before the cryptocurrency’s collapse last month. “It's now worth roughly ~$670,” added The Defi Edge.

In May, the stablecoin TerraUSD (UST) lost its peg to the US dollar and its sister coin Terra (LUNA) also collapsed.  

Additionally, an analysis on 16 June by Messari.io said 27 assets that 3AC had invested in suggest the crypto hedge fund would have lost 60% of its investment for the year to date. The assets included lead cryptos such as BTC, Ethereum (ETH), and Avalanche (AVAX).  

Kyle Davies, co-founder of 3AC said: “We have always been believers in crypto and we still are. We are committed to working things out and finding an equitable solution for all our constituents.”

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