Three Arrows Capital Faces Risk of Default, Deadline to Repay Nears
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Voyager Lent Bitcoins and Stable coin in USDC to 3AC
A digital asset firm called Voyager Digital reported lending Three Arrows Capital 15,250 bitcoins and $350 million in the stablecoin USDC. The total loan is worth more than $675 million at Monday's pricing. Three Arrows Capital was given until June 24 to pay back $25 million USDC and the outstanding loan by Monday, June 27, according to Voyager. Voyager stated that neither of these sums was paid back last week and added that a notice of default might be issued if 3AC does not pay the money back. Voyager stated that it "intends to pursue recovery against 3AC" and is consulting with counsel "about available legal remedies."
Three Arrows Capital Facing a Credit Crunch
The financial crunch that Three Arrows Capital is still experiencing has been made worse by the ongoing downward pressure on bitcoin prices. On Monday, Bitcoin was circling the $21,000 mark and has fallen around 53% this year. In the meantime, the U.S. Federal Reserve has hinted at additional interest rate increases to rein in spiraling inflation, which has dampened interest in riskier assets. One of the most significant hedge funds focused on cryptocurrencies, 3AC, has taken out sizable loans from numerous businesses and invested in various digital asset initiatives. This has generated worries about further contagion throughout the sector.