Voyager, a major creditor with three arrows at the bottom of 1 billion US dollars: American customers absorb a large amount of savings, mainly providing unsecured loans
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Original editor: Colin Wu
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Voyager is a cryptocurrency asset brokerage offering order execution, market data, wallet and custody services, among other services. At the same time, the Voyager loyalty program is launched for customers who hold a certain amount of VGX to unlock various Tokens, including VGX staking rewards, income reward enhancements, and cryptocurrency return rewards.
As of March 31, 2022, total revenue for the first quarter was US$102.7 million, a year-on-year increase of 70%, but a quarter-on-quarter decrease of 38%. Net loss for the quarter was $61.44 million and adjusted EBITDA was -$53.5 million.
The company's main business is to provide customers with services to buy, sell or execute encrypted asset orders. Therefore, the main operating income is transaction fee income. Reduced income. Transaction revenue in the first quarter was only US$33.39 million, a year-on-year decrease of 38%. The company claims that it will strengthen and expand the wallet payment business in the future, and has acquired Coinify to match the capabilities of the merchant payment system.
The company's second business is interest income from encrypted asset loans. Most of these loan agreements are unsecured and can be for a fixed term of less than one year or for an indefinite period. The interest income in the first quarter was US$31.03 million, a year-on-year increase of 3.6 times. This business is gradually replacing the trading business. It can be seen from the financial report that the collateral is only about 1/10 of the total loan amount.
As of the first quarter, Voyager's assets receivable in cryptocurrencies are as follows:
Mainly USDC, ETH and BTC, with a total value of 2 billion US dollars. The following seven companies mainly apply for loans, and the loan interest rates mentioned in the table are all currency standard interest rates.
According to previous official announcements, this batch of loans included 15,250 BTC and 350 million USDC from 3AC, with a total value of about US$1 billion (estimated according to market prices at the end of March), accounting for half of the total. Although we have no way of knowing the exact identities of the 7 companies, based on the amount owed and the company’s registered address disclosed (A is in the British Virgin Islands and B is in Singapore), it is likely that both companies A and B are 3ACs.
3AC's official website also shows that the courts of the BVI of the British Virgin Islands have non-exclusive jurisdiction over all claims or disputes relating to, arising out of, or relating to this website, its use and these terms and conditions.
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In addition, as of March 31, 2022, Voyager also holds 25,000 BTC, 270 million ADA, 170 million VGX and other cryptocurrencies, with a total value of 3.43 billion US dollars. Thus, Voyager has $5.68 billion in crypto-assets and receivables, which is almost all of its assets. According to last year's annual report data, Voyager's total assets were US$6.22 billion and its total liabilities were US$5.9 billion, of which US$5.68 billion was encrypted assets stored by customers. It added 115,000 customer accounts in the first quarter, mostly in North America, and it hired four-time Super Bowl champion Rob Gronkowski as an ambassador.
We can think of Voyager as a bank that absorbs depositors' encrypted assets, provides basic services such as transfers and transactions, and at the same time lends deposits to other institutions to earn interest. From this perspective, we can measure the degree of risk through two indicators, one is the reserve ratio and the other is the bad debt ratio.
Voyager's RRR is 60.4% (34.3/56.8). For banks, this is a very safe figure and basically will not cause a run. However, companies like Voyager are obviously not as risk-tolerant as banks, so it is necessary to keep more reserves.
As for bad debts, the bad debt rate of short-term loans (within one year) of general enterprises or banks is relatively safe within 5%, while the bad debt rate of Voyager's short-term loans (3AC needs to be repaid before June 27 this year) has reached 50%. This is very dangerous.
Because of its business model, Voyager is facing a lot of regulatory pressure in the United States. Its first quarter disclosure stated that between March 29, 2022 and April 13, 2022, the company received a lot of regulatory pressure from Indiana, Kentucky, and New Jersey. , Oklahoma, and South Carolina state departments of securities cease and desist orders, and similar orders or notices from Alabama, Texas, Vermont, and Washington. The orders generally allege that firms engage in the issuance and sale of unregistered securities or investment contracts in the form of corporate client accounts through incentive programs that allow customers to receive incentives from their eligible crypto asset balances.
Ironically, Voyager emphasizes in each financial report that, based on its due diligence, the company believes that the borrower is a high-quality financial institution with sufficient funds to meet the debt due. The company's due diligence procedures for its lending activities may include review of the borrower's financial condition, the borrower's liquidity level in applicable assets, review of the borrower's management, review of certain internal control procedures of the borrower, review of market information, And monitor the company's risk exposure threshold. The Risk Management Committee of the Company holds regular meetings to assess and monitor the credit risk of each counterparty.
In December 2021, BRIAN BROOKS, a well-known industry figure who once served as Chief Legal Officer of Coinbase, Acting Comptroller of the U.S. Currency, and CEO of Binance America, joined the Voyager Board of Directors.
Voyager officially announced on the 22nd that it will change the withdrawal limit within 24 hours from the original 25,000 US dollars to 10,000 US dollars, and a maximum of 20 withdrawals can be made. At the same time, it signed an agreement with Alameda Research to obtain a credit line of 200 million US dollars and 15,000 BTC to ensure that Voyager's customers will not be affected by the 3AC collapse. This move can solve the short-term liquidity crisis, but if 3AC continues to be unable to repay its debts, Voyager's sword of Damocles will be in the air.
Alameda, controlled by SBF, became its shareholder as early as 2021: October 2021 Voyager entered into a subscription agreement to issue and sell 7,723,996 common shares of the company to Alameda Research Ltd. at a price of $9.71 for a total purchase price of $75 million . Transaction closes on November 22, 2021.
other information:
Financial report for the first quarter of 2022
