Traveler (OTCMKTS:VYGVF) the stock closed down 30%, hitting a new 52-week low of 25 cents in intraday trading. The crypto company announced today that it will temporarily suspend all trading, deposits and withdrawals following the events of the Capital of the Three Arrows (3AC) fiasco. CoinDesk reports that 3AC failed to repay Voyager on its loan of 15,250 Bitcoin and $350 million in USDC.
In a series of tweets, CEO Stephen Ehrlich said Voyager had “took steps to avoid this result”, which included receiving a loan from FTX-supported Alameda Search. The loan provided the company with $200 million in cash/USD coin (USDC-USD) and 15,000 Bitcoins (BTC-USD) revolving line of credit. Voyager currently has $75 million drawn on its revolving credit.
Voyager also suspended the use of its debit card as customers were told to cancel all deposits and automatic payments. With that in mind, let’s get into the details of the announcement.
VYGVF share: Voyager suspends trading
Ehrlich acknowledged that the suspension is “far from optimal,” but did not provide details on when trading, deposits and withdrawals will resume. Meanwhile, the company is currently looking for solutions to recoup its 3AC losses. Ehrlich said Voyager is involved in the “insolvency process in the British Virgin Islands.” The process began on Monday and will be managed by Teneo Restructuring.
Voyager customers will still receive loyalty rewards for the month of June. He also plans to pay out rewards for July. As of June 30, the company had $685 million in crypto assets and $1.12 billion in crypto assets on loan. The loaned crypto assets include the failed payment from 3AC. The platform lent 21,796 Bitcoins, including 3AC’s 15,250 Bitcoins as well. Voyager also loaned USDC 401 million and 170,336 Ethereum (ETH-USD). Cash held for customers totals $355 million.
The path ahead for Voyager is clouded with uncertainty. There is speculation that FTX may make a bid for the company, although nothing has been confirmed. Today, FTX announced that it has accepted a call option BlockFi up to $240 million. This came after FTX provided BlockFi with a $250 million revolving credit facility.
“We are exploring strategic alternatives and having productive conversations with various parties, and hope to have more to share in the near future. Thank you for your support.”
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At the date of publication, Eddie Pan did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.