Crypto Lender, Voyager Digital Plans to Settle with Two Top executives Related to Three Arrows (3AC) Loans
Crypto Lender, Voyager Digital Plans to Settle with Two Top executives Related to Three Arrows (3AC) Loans.
According to court filings submitted on Monday, crypto lender Voyager Digital plans to settle with two of its top executives regarding loans they made to crypto hedge fund Three Arrows Capital (3AC).
The filings show that Stephen Ehrlich, the company’s CEO, and Evan Psaropoulos, the company’s CFO, agreed to allow Voyager to lend Three Arrows nearly $1 billion in crypto in March with very little financial disclosure from the fund.
As LUNA and its sister token terraUSD collapsed in May, Voyager inquired about the impact on Three Arrows and was initially told that Three Arrows was not exposed to LUNA.
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In June, however, 3AC employee Tim Lo advised Voyager to recall all of the loans it had made to the company since 3AC’s founders had not responded to Lo’s and other employees’ information requests.
After hours of communicating with 3AC, Voyager recalled all its outstanding loans, and the hedge fund was liquidated in the British Virgin Islands a short time later.
Pursuing Negligence Claims Against Two Executives
An investigation conducted by two of Voyager’s board members concluded that It was determined that pursuing negligence claims against Ehrlich and Psaropoulos, who is now Voyager’s chief commercial officer, would be difficult and expensive and that no significant recovery could be achieved.
Voyager proposes a settlement that includes Ehrlich paying $1.1 million in cash to Voyager, pursuing claims for up to $20 million under directors and officers insurance policies, and letting Ehrlich and Psaropoulos continue working.
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There is a possibility that the bankruptcy judge in the case will approve the settlement. In July, Toronto-based Voyager filed for bankruptcy, citing losses on loans to Three Arrows as the primary reason.
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