The downturn in the cryptocurrency market deepened this week, as major players protested liquidations, withdrawal freezes, trading halts – and, in at least one case, a bailout.
crypto Broker Voyager Digital Limited On Friday, it announced a suspension of trading, deposits and withdrawals, while BlockFi, a leading digital-asset lender, secured the backing of exchange FTX US with acquisition potential. Both companies were rescued from the crisis of Three Arrows Capital LimitedThe beleaguered crypto hedge fund that this week was ordered for liquidation by a British Virgin Islands court and filed for Chapter 15 bankruptcy protection in New York.
Meanwhile, the cryptocurrency market has tumbled, wiping out nearly $2 trillion in market cap and leaving market participants restless at the end of the fourth week of July.
“I was starting to think the dominoes had stopped falling in mid-June,” said Aaron Brown, crypto investor and Bloomberg Opinion contributor. “I suspect there will be more bad news by Tuesday morning, although I don’t make any specific predictions.”
The industry’s recent liquidity issues stemmed from the troubles of Three Arrows, which suffered major losses after making huge bullish bets on everything from bitcoin. LunaPart of Earth The ecosystem whose May explosion triggered a major market convulsion. Founded in 2012 by former Credit Suisse traders, Zhu Su and Kyle Davis, Three Arrows has become a symbol of the industry’s excesses during last year’s bull run, when it built up leverage that proved disastrous when the market turned.
The full extent of their influence on the industry is beginning to emerge: Blockchain.com and Deribit, a crypto derivatives exchange, confirmed this week that they are among the creditors that sought the liquidation of Three Arrows. A spokesperson for Blockchain.com said it is also cooperating with an ongoing investigation into the activities of Three Arrows, which has been rebuked by Singapore’s central bank over false information.
“Crypto is an emerging industry, but intense competition has developed among service providers, who are vying to trade a small group of entirely new counterparties,” said Alex Felix, managing partner at Coinfund.
Kyle Samani, co-founder and managing partner of Multicoin Capital, said there is a need for proper regulations and transparency, and an industry alliance must come together to protect retail customers.
Voyager chief executive Stephen Ehrlich said it needed additional time to explore strategic options, something like Celsius Network, which has also stopped the evacuation, is also following. According to a person familiar with the matter, Sam Bankman-Fried, who has served as the lender of last resort for the industry, had previously turned down Celsius’s bailout request.
“It was a very difficult decision, but we believe it is the right one given the current market conditions,” Ehrlich said in a statement.
Voyager fell as much as 43% in US trading following Friday’s news, making it one of the worst-performing crypto stocks. Based in New York, Voyager offers crypto trading, staking – a way to earn rewards for holding certain cryptocurrencies – and yield products.
Last month, Voyager issued a notice of default to Three Arrows on approximately $675 million in debt. It is actively pursuing recovery from crypto hedge funds, including a court-ordered liquidation process in the British Virgin Islands. It has got a line of credit from Alameda Research, the trading firm of Bankman-Fried.
Banksman-Fried, for his part, is already eyeing more acquisitions as he consolidates his outside influence in the industry. He added that the struggling crypto-mining industry could be his next target.
crypto Broker Voyager Digital Limited On Friday, it announced a suspension of trading, deposits and withdrawals, while BlockFi, a leading digital-asset lender, secured the backing of exchange FTX US with acquisition potential. Both companies were rescued from the crisis of Three Arrows Capital LimitedThe beleaguered crypto hedge fund that this week was ordered for liquidation by a British Virgin Islands court and filed for Chapter 15 bankruptcy protection in New York.
Meanwhile, the cryptocurrency market has tumbled, wiping out nearly $2 trillion in market cap and leaving market participants restless at the end of the fourth week of July.
“I was starting to think the dominoes had stopped falling in mid-June,” said Aaron Brown, crypto investor and Bloomberg Opinion contributor. “I suspect there will be more bad news by Tuesday morning, although I don’t make any specific predictions.”
The industry’s recent liquidity issues stemmed from the troubles of Three Arrows, which suffered major losses after making huge bullish bets on everything from bitcoin. LunaPart of Earth The ecosystem whose May explosion triggered a major market convulsion. Founded in 2012 by former Credit Suisse traders, Zhu Su and Kyle Davis, Three Arrows has become a symbol of the industry’s excesses during last year’s bull run, when it built up leverage that proved disastrous when the market turned.
The full extent of their influence on the industry is beginning to emerge: Blockchain.com and Deribit, a crypto derivatives exchange, confirmed this week that they are among the creditors that sought the liquidation of Three Arrows. A spokesperson for Blockchain.com said it is also cooperating with an ongoing investigation into the activities of Three Arrows, which has been rebuked by Singapore’s central bank over false information.
“Crypto is an emerging industry, but intense competition has developed among service providers, who are vying to trade a small group of entirely new counterparties,” said Alex Felix, managing partner at Coinfund.
Kyle Samani, co-founder and managing partner of Multicoin Capital, said there is a need for proper regulations and transparency, and an industry alliance must come together to protect retail customers.
Voyager chief executive Stephen Ehrlich said it needed additional time to explore strategic options, something like Celsius Network, which has also stopped the evacuation, is also following. According to a person familiar with the matter, Sam Bankman-Fried, who has served as the lender of last resort for the industry, had previously turned down Celsius’s bailout request.
“It was a very difficult decision, but we believe it is the right one given the current market conditions,” Ehrlich said in a statement.
Voyager fell as much as 43% in US trading following Friday’s news, making it one of the worst-performing crypto stocks. Based in New York, Voyager offers crypto trading, staking – a way to earn rewards for holding certain cryptocurrencies – and yield products.
Last month, Voyager issued a notice of default to Three Arrows on approximately $675 million in debt. It is actively pursuing recovery from crypto hedge funds, including a court-ordered liquidation process in the British Virgin Islands. It has got a line of credit from Alameda Research, the trading firm of Bankman-Fried.
Banksman-Fried, for his part, is already eyeing more acquisitions as he consolidates his outside influence in the industry. He added that the struggling crypto-mining industry could be his next target.