Voyager Digital suspends all trading, deposits and withdrawals

The cryptocurrency industry, which has over 19,000 virtual currencies, compared the current state of the market to the early years of the Internet. However, industry players have stated that most of these coins will collapse.

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Digital asset brokerage Voyager Digital has suspended all customer trading, deposits, withdrawals and loyalty rewards. according to the statement released Friday afternoon.

“It was an extremely difficult decision, but we believe it was the right one given current market conditions,” said Stephen Ehrlich, CEO of lending company Voyager.

Ehrlich went on to say that the decision is designed to give the firm additional time to continue “exploring strategic alternatives with various stakeholders” and that they will provide additional information at “an appropriate time.”

Voyager’s announcement comes amid a slew of margin calls and defaults across the sector, making the digital broker the latest collateral damage from a broad cryptocurrency market sell-off. The two most widely traded cryptocurrencies, bitcoin and ether, are down more than 70% from their peaks last November, and the crash of the UST stablecoin in May sent shock waves through an already turbulent market.

The news comes days after one of Voyager’s customers failed to make payments on a hundreds of millions of dollars of loan, raising concerns about the contagion effect of insolvency in the industry.

On Monday the broker issued a notice that well-known crypto hedge fund Three Arrows Capital (3AC) defaulted on a loan of more than $670 million. Voyager said at the time that it intended to continue recovering from 3AC, and in the meantime said it would continue to operate and fulfill customer orders and withdrawals.

As of June 24, Voyager stated that he has about $137 million and crypto assets. The company also noted that it has access to a $200 million cash and USDC stablecoin line of credit, as well as a $15,000 bitcoin ($318 million) revolving line of credit from Alameda Ventures, which is the founder’s quantitative trading firm. FTX by Sam Bankman-Fried. .

Last weekAlameda has given Voyager $500 million in funding, and the firm has already received $75 million from that line of credit, but that doesn’t seem to be enough to keep the business running as usual.

So far, investors in the world’s two largest cryptocurrencies by market cap do not appear to be bothered by the news. bitcoin increased by about 2% and ethereum rose more than 4% by the close of normal market hours on Wall Street.

Voyager is a competitor to crypto lending company BlockFi, which has also been the focus of the recent liquidity crunch in the sector. FTX just closed a $680 million loan deal to acquire BlockFi. according to Blok.

The Voyager solution tracks the solution of the popular cryptocurrency staking and lending platform Celsius, which similarly suspended all conclusionsswaps and transfers between accounts due to “extreme market conditions” on June 13th. Celsius has not yet announced specific guidance on how to proceed.