By Geoffrey Smith
Investing.com — Sam Bankman-Fried’s clean-up of the mess caused by the collapse of hedge fund 3 Arrows Capital continues apace.
Canadian-based crypto investment platform Voyager Digital said it will limit daily customer withdrawals, under the terms of a $200 million bailout it secured from the FTX CEO’s hedge fund on Thursday.
Alameda Research, through which Bankman-Fried manages a portfolio of crypto investments, is the largest shareholder of Voyager with an 11.86% stake. On Wednesday, Voyager confirmed it had secured a revolving credit facility with Alameda for $200 million in cash and 15,000 (worth another $30 million at this week’s prices) to backstop its customers’ assets, after the collapse of 3AC left it facing massive losses.
Voyager’s exposure to 3AC consists of 15,250 Bitcoin and $350 million , a stablecoin pegged 1:1 to the dollar. For comparison, it has only $152 million in unrestricted cash.
Hong Kong-based 3AC said last week it has hired restructuring advisers after being badly wrongfooted by the collapse of the Terra Luna network and sharp declines in other alt-coins this year. Its collapse has exposed a string of risk management failures across other crypto lending and investment platforms, most of which have struggled to cope with redemption requests that have surged as cryptocurrency prices declined in recent weeks.
Voyager, which boasted over 4 million unique users and some $5.8 billion in assets on its platform in its latest results, said it intends to pursue 3AC for what it’s owed but “is unable to assess at this point the amount it will be able to recover.”
Effective immediately, Voyager will limit daily withdrawals to the equivalent of $10,000, down from $25,000 previously. That still represents a greater degree of liquidity than that enjoyed by customers of various other crypto lending platforms, including Celsius Network, where all withdrawals have been suspended now for 11 days.
The limits reflect the constraints imposed upon Voyager under the terms of its bailout. Alameda has insisted that Voyager draw down no more than $75 million over any rolling 30-day period, and that its debt must be limited to approximately 25% of customer assets on the platform, less $500 million. It also insisted that Voyager find additional sources of funding within 12 months.
Bankman-Fried had intervened on Thursday to bail out BlockFi, another digital asset platform reportedly caught out by 3AC’s collapse, also structured as a revolving credit facility of similar size to Voyager’s.