Crypto platform Voyager Digital cuts daily withdrawal limit to $10,000 after revealing $660 million exposure to struggling crypto hedge fund
- Crypto platform Voyager Digital has cut the daily withdrawal limit on customer accounts to $10,000 from $25,000.
- The move comes after Voyager warned it may not be repaid a loan it made to hedge fund Three Arrows Capital. The loan was valued around $660 million as of Thursday.
Voyager Digital has cut the daily withdrawal limit for its customers by thousands of dollars, with the cryptocurrency trading platform making the move after disclosing it could lose more than $600 million on a hedge fund loan.
The Canada-based company reduced the daily withdrawal limit to $10,000 from a previous level of $25,000, with the change reflected on its website late Wednesday.
Voyager Digital shares on Thursday rose as much as 17% to 0.86 Canadian cents on the Toronto Stock Exchange, slicing into Wednesday's 53% plunge in value.
The shares had tumbled after the company on Tuesday said it may issue a default notice to crypto hedge fund Three Arrows Capital for failure to repay a loan made to it by its Voyager Digital LLC operating subsidiary. The non-repayment by the struggling hedge fund left the crypto platform exposed to a potential loss of billions of dollars.
Voyager had loaned 15,250 bitcoin and $350 million of the USDC stablecoin to Dubai-based Three Arrows Capital, or 3AC. Bitcoin on Thursday traded around $20,376 and together with the stablecoin exposure, Voyager faced a potential loss of $660 million.
3AC had failed to meet margin calls from several lenders earlier this month, according to the Financial Times.
The loan-loss warning from Voyager arrived at a dismal time for the broader cryptocurrency market which is undergoing what some analysts have called a "crypto winter". Prices for bitcoin and other digital assets have tumbled since the market's valuation hit an all-time high above $3 trillion in November.
Voyager has asked 3AC to repay the entire loan balance by June 27 and had requested an initial repayment of $25 million USDC by Friday, June 24. Failure by 3AC to repay either requested amount will constitute a default event, it said.
" Voyager intends to pursue recovery from 3AC and is in discussions with the Company's advisors regarding the legal remedies available," the company said, adding that it "is unable to assess at this point the amount it will be able to recover from 3AC."
The crypto market was valued at $941 billion as of Thursday, according to CoinGecko. Bitcoin has dropped by more than 50% since reaching an all-time high above $68,000 seven months ago.
