Cryptocurrency exchange Voyager Digital announced Friday that it was temporarily suspending trading, deposits, withdrawals and loyalty rewards. “The failure of a borrower, Three Arrows Capital, to repay a substantial loan from us makes this the right path forward,” Voyager Digital CEO Stephen Ehrlich said on Twitter soon after the service suspension went into effect.
“This decision, while far from optimal, will give us time to work to strengthen our balance sheet, a necessary condition to protect assets and preserve the future of the Voyager platform we have built together,” Ehrlich continued. A statement issued by the company said it has engaged Moelis & Co. and the Consello Group as financial advisers, and Kirkland & Ellis as legal advisers.
Voyager Digital issued a notice of default to Three Arrows Capital, also known as 3AC, on Wednesday after the Singaporean crypto hedge fund failed to repay a 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) loan. Voyager gave assurances at the time that it would continue operations. The exchange explained that it had accessed $75 million of a revolving loan of 15,000 BTC it had taken out from Alameda Research to cover its exposure to the loans 3AC was unable to repay. It also said it had $137 million in cash and crypto on hand.
Related: Singapore reprimands 3AC for providing false information
A court in the British Virgin Islands reportedly ordered the liquidation of 3AC shortly after Voyager Digital filed its notice of default. Reports emerged June 16 that 3AC had failed to meet margin calls that week.
Voyager Digital did not indicate when it would restore trading, deposit, withdrawal and loyalty reward services. Its announcement came in the afternoon before a long weekend in the United States. Monday is U.S. Independence Day, which is a federal holiday.
Read More:Voyager Digital freezes trading, deposits, withdrawals and rewards, blames 3AC default