Voyager Digital stated on Wednesday that it might be necessary to send a default notice to troubled hedge fund Three Arrows Capital (3AC) about its outstanding debts.
According to Voyager, its current exposure to 3AC is made up of 15,250 Bitcoin ($311 million) and $350 million worth of USDC. The firm had first asked for a $25 million USDC repayment by June 24. It also has asked 3AC to pay the remaining amount by June 27.
Both of the required sums have not yet been paid back by 3AC. If the loan is not repaid, Voyager will issue a default notice to the hedge fund, following which the broker will take legal action to reclaim the funds.
Voyager seeks advice to recover funds from 3AC
In a news release, Voyager stated that it was in discussions with its advisers regarding all possible legal paths for recovering its funds. The company is unable to gauge how much of its funds it will be able to recover from 3AC.
3AC is considering asset sales and bailout negotiations in light of potential insolvency. The hedge fund was subject to a series of unreachable margin calls due to rapid decline in cryptocurrency prices.
Its finances were seriously harmed by its exposure to the Terra crash. The hedge fund was seen dumping the majority of its holdings to avoid a complete liquidation of its positions.
Earlier this week, Voyager received a $200 million cash loan from the cryptocurrency exchange FTX. Along with a 15000 Bitcoin revolving facility to help it manage its tight finances. However, it is not the only company affected by the collapse of 3AC.
Three Arrows liquidation puts more strain on crypto market
BlockFi, a cryptocurrency lender, is also exposed to 3AC having flagged a large liquidation earlier this week. Additionally, FTX provided the company with a $250 million bailout.
More recently, Maple Finance added that it is under strain due to a potential 3AC and other troubled crypto lender contagion.
This month, the price of cryptocurrencies has been significantly impacted by concerns over 3AC’s insolvency. As Investors are worried about a large-scale token dump following its liquidation.
