Key takeaways:
- Voyager Digital halted its operations last Friday, after being unable to collect debt payments on a $600M+ loan to crypto hedge fund Three Arrows Capital
- Crypto lending portal Vauld announced on Monday all withdrawals and deposits have been paused and restructuring options are being explored
- A number of crypto trading platforms have been facing liquidity problems in recent weeks due to the heightened volatility and broader bearish trend
Top crypto investment platforms strapped for cash due to a spike in withdrawals
The ongoing cryptocurrency downturn has led to a massive drop in market valuations of most digital assets. Bitcoin is down more than 34% in the past month, Ethereum close to 40%. As a result of plunging values, several cryptocurrency lending and investment platforms are facing severe liquidity challenges.
On Friday, publicly traded alternative investment giant Voyager Digital announced a temporary suspension of trading, deposits, and withdrawals due to the “current market conditions.” The company’s CEO Stephen Ehrlich wrote in a statement that the decision to halt operation gives the firm “additional time to continue exploring strategic alternatives with various interested parties while preserving the value of the Voyager platform.”
Voyager has been facing a dramatic increase in capital outflows due to its exposure to the insolvent crypto hedge fund Three Arrows Capital (3AC), which owes Voyager more than $600 million worth of Bitcoin and USDC. Voyager’s shares have seen a 97% price reduction since the start of 2022 in response to the company’s inability to collect debt payments and the general crypto downturn.
Similar to Voyager, a prominent crypto lender and exchange platform Vauld announced earlier today that it is halting all withdrawals and deposits. In a statement shared with the community, Vauld’s CEO Darshan Bathija noted that the platform’s users have withdrawn close to $200 million since June 12, which gave way to liquidity problems. Like Voyager, the Vauld team hopes that a suspension of its operations will give the company “breathing space to carry out the proposed restructuring exercise.”
In related news, Celsius, another centralized investment platform that allows traders to earn interest on their crypto deposits and take out crypto loans collateralized with digital currencies, announced earlier this month it is pausing withdrawals, crypto swaps and internal transfers due to “extreme market conditions.”
