Voyager Digital secures $485 million loan, more crypto bailouts on the horizon

Crypto broker Voyager Digital has signed a non-binding term sheet with Alameda Research to secure credit lines of US$485 million.

The first credit facility is cash/USDC-based with an aggregate principal amount of US$200 million, while the second is for 15,000 in Bitcoin (BTC). The deal was made in light of the crypto bear market, as Voyager is looking to safeguard customer assets amidst volatility.

According to Voyager’s Chief Executive Officer Stephen Ehrlich, the move provides the company with “more flexibility to mitigate current market conditions” and to strengthen its relationship with Alameda. “Ongoing, prudent risk management as well as a strong balance sheet” are two ways Voyager is working to prove its commitment to consumer protection.

The revolving term credit facilities expire in December 2024 and have an annual interest rate of 5 per cent payable on maturity. Voyager says that it has more than US$200 million on its balance sheet alongside the newly-secured funds.

Established in 2017, Alameda Research is a principal trading firm headed by FTX founder Sam Bankman-Fried (SBF). The platform’s loan to Voyager is a part of its efforts to step in and lend a hand to crypto players struggling with liquidity issues. 

On the back of a steep market downturn, major companies like Celsius and Three Arrows Capital (3AC) are seemingly veering towards insolvency. And with fears of a ripple effect looming over the entire digital asset ecosystem, SBF is assisting with big bailouts.

This is no new feat for the billionaire, however, as in August 2021, FTX provided Japanese crypto exchange Liquid with $120 million, before acquiring the platform in March this year.

And now, Voyager Digital is the latest industry player in need of support. The stock of the brokerage firm has tanked over 90 percent year to date.