With Voyager Digital, the price turbulence at Bitcoin & Co is tearing another company into the abyss. The bank, which specializes in cryptocurrency lending, has filed for bankruptcy protection in the US. The reason given by company chief Stephen Ehrlich was the recent fall in the price of cyber currencies and the failure of loan payments by the hedge fund Three Arrows.
According to previous reports, Voyager has a total commitment to Three Arrows of approximately $760 million, including a $350 million loan in the cryptocurrency USD Coin. Two weeks ago, Voyager threatened to send Three Arrows a letter of formal notice. This notice of default is accompanied by a reminder to settle claims within a certain period. Shortly thereafter, the hedge fund filed for bankruptcy.
The TerraUSD Collapse Had Huge Consequences
Three Arrows ran into trouble over the price drop of the “stablecoin” TerraUSD – krone.at reported. Actually, transactions with other cryptocurrencies should always keep the price of TerraUSD at one US dollar. In mid-June, Voyager’s rival Celsius also suspended withdrawals and transfers between accounts.
Fearing a recession due to drastic interest rate hikes by central banks and the fallout from the war in Ukraine, investors have been fleeing risky assets, including cryptocurrencies, for months. Compared to its record high of about $69,000 last November, Bitcoin has since lost more than 70 percent and is currently trading at about $20,000. The second-largest cyber-currency Ethereum fell nearly 77 percent to currently around $1100.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
