With over 19,000 cryptocurrencies in existence, the crypto industry has likened the current state of the market to the early years of the Internet. However, industry players say most of these coins will crash.
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Digital asset brokerage Voyager Digital has halted all customer trading, deposits, withdrawals and loyalty rewards, according to a statement Friday afternoon release.
“This has been an extremely difficult decision, but we believe it is the right decision given the current market conditions,” said Stephen Ehrlich, CEO of lending company Voyager.
Erlich went on to say that the decision is designed to give the company more time to continue to “explore strategic alternatives with different interested parties” and that they will provide additional information on ” right time”.
Voyager’s announcement comes amid numerous margin and default calls across the sector, making the digital broker the latest collateral damage of the crypto market sell-off. large school. The two most widely traded cryptocurrencies, bitcoin and ether, are down more than 70% from their peaks last November, and the UST stablecoin crash in May sent shock waves through. through an already chaotic market.
The news comes days after one of Voyager’s customers defaulted on a loan worth hundreds of millions of dollars, sparking growing concerns about the default effect across the industry.
On Monday, the broker issue a notice Popular crypto hedge fund Three Arrows Capital (3AC) defaulted on a loan worth more than $670 million. At the time, Voyager said that it intends to pursue recovery from 3AC and, in the immediate future, said it would continue to operate and fulfill customer orders and withdrawals.
As of June 24, Voyager said it has around $137 million and owns crypto assets. The company also noted that it has access to a $200 million cash line and USDC stablecoin line of credit, as well as a 15,000 bitcoin revolving line of credit from Alameda Ventures, the firm. Quantitative trader Sam Bankman-Fried by FTX founder.
Last weekAlameda has committed $500 million in funding to Voyager, and the company has withdrawn $75 million from that line of credit, but that doesn’t seem to be enough to keep business as usual.
So far, investors in the world’s two largest cryptocurrencies by market capitalization seem unnerved by the news. Bitcoin an increase of about 2% and ethereum rose more than 4% at the end of regular trading hours on Wall Street.
Voyager is a competitor to crypto lender BlockFi, which has also been caught up in the sector’s recent liquidity crunch. FTX just reached a $680 million credit agreement to acquire BlockFi, according to The Block.
Voyager’s decision to track popular crypto lending and staking platform, Celsius, similarly halted all withdrawalsswaps and transfers between accounts due to “extreme market conditions” on June 13. Celsius has yet to publish clear instructions on next steps.
