BlogWhy Voyager digital pause withdrawals for its more than 3.5 million users.

Why Voyager digital pause withdrawals for its more than 3.5 million users.

Last week Voyager digital became the second popular crypto platform to pause withdrawals for its more than 3.5 million users the first being Celsius which paused withdrawals in mid-June leaving more than 1 million users in crypto loss limbo.

As Celsius collapsed you might recall our last article about this that it had mostly to do with the mismanagement of user funds that was going on behind the scenes. It looks like it’s a similar story for Voyager digital. As it had lent out 670 million dollars of crypto to defunct crypto hedge fund three arrows Capital (3AC) apparently with zero collateral. That’s right a 670 million dollar unsecured loan.

Now to Voyager digital’s credit the company acknowledged that it had significant exposure to three hours of capital and immediately sought relief. Which it received from crypto trading firm Alameda research in the form of a 500 million dollar loan. It seems though that this only accelerated the run on the bank by its users which the crypto platform tried to slow by limiting withdrawal amounts.

It seems that didn’t work either because on the 1st of July Voyager digital announced it would be temporarily shutting its doors. All the while Voyager digital stock continued to collapse. The only reason it didn’t go to zero on Friday why because its stock was trading on the stock exchange of Toronto which was closed on July 1st because it was Canada Day.

What many are wondering now is whether FTX will offer to acquire Voyager digital in the same way it offered to acquire BlockiFi. Namely, by increasing the loan, it had given to Voyager digital on the condition that it can buy the crypto platform for pennies on the dollar if it fails to meet its debt obligations to FTX. This is unlikely given that Voyager digital seems to be in a lot more trouble than BlockFi.

FTX CEO Sam Bankmanfried said that “there are many huge crypto firms that are gone and it’s not practical to stop them for reason like a substantial hole in the balance sheet regulatory issues or that there’s not much of a business left to be saved” Sam also mentions that “ some third-tier exchanges exist that are already secretly insolvent which begs the question of what the third tier means especially since Sam didn’t provide any names”.

Related: What happened to 3ac?

The best thing to do in this situation is to be safe and withdraw some or even all of your crypto funds from centralized crypto platforms and store them in your wallets. Well, soon we will provide you with complete details with facts that which exchanges or wallets are safe.

RELATED ARTICLES

Most Popular

Latest Posts