Gaming, NFTs and Crypto VC Three Arrows Capital Defaults on $670M Loan

Three Arrows Capital on Monday received a notice from digital asset brokerage company Voyager Digital after defaulting on a $670 million loan.
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Quick take:

  • Three Arrows Capital has defaulted on a $670 million loan.
  • The blockchain gaming, NFTs and crypto venture capital form received a notice from the issuer Voyager Digital on Monday morning.
  • According to the notice, 3AC failed to repay a loan of $350 in USDC and 15,250 BTC worth about $320 based on the current bitcoin price.

Three Arrows Capital (3AC) has defaulted on a $670 million loan. The blockchain gaming, non-fungible tokens (NFTs) and crypto venture capital firm received a notice from Voyager Digital on Monday.

Shares of the digital assets brokerage platform plummeted 60% last week amid the $670 million funds exposed to the embattled hedge fund. 

According to the notice, 3AC failed to repay a loan of $350 million in the US dollar-pegged stablecoin (USDC) and an additional 15,250 in bitcoin, or approximately $320 million as of this writing.

The crypto hedge fund’s solvency issues come following a prolonged period of decline in crypto prices. Both bitcoin and ether have plunged significantly from their all-time highs reached last November, pushing the overall crypto market cap to just over $900 billion, down from $3 trillion.

Although Voyager continues to operate normally with its platform fulfilling customer orders and withdrawals, the company said it intends to recover the funds loaned to 3AC in due course.

“We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands,” said Voyager CEO Stephen Ehrlich.

The company had indicated last Friday that it had approximately $137 million in cash and cash equivalents, as well as, further access to $200 million cash and USDC revolver plus 5,000 bitcoin ($318 million) revolver from Alameda Ventures.

Alameda last week committed $500 million in financing to Voyager, from which the digital asset brokerage services provider has already taken $75 million.

“The default of 3AC does not cause a default in the agreement with Alameda,” the statement said.

3AC is one of the leading blockchain gaming, NFTs and crypto investment firm. Some of its most notable investments include the popular NFT blockchain game Axie Infinity and Cryp[to Raiders.

The company has also invested in Multiverse, Nyan Heroes, and Imperium Empires, among others.

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