Three Arrows Capital's Collapse Drags Voyager and BlockFi Into a Liquidity Crisis

Three Arrows Capital's implosion continues to spread through the industry. Bad positions in LUNA, staked ETH, and Grayscale's GBTC trust triggered hundreds of millions of dollars in liquidations for the fund, and the ten days leading up to this point have made clear that co-founders Zhu Su and Kyle Davies had taken on even more risk than the rest of the market. That risk-taking appears to have built a liability now landing on the fund's creditors, who say they've had trouble even getting the pair to respond.

Earlier public statements from both men read very differently in hindsight. Zhu Su had written that "those who do not manage their risk will have the market manage it for them," while Kyle Davies posted that there would be a "couple more liquidations then up only."

Zhu Su's own reckoning came with LUNA's collapse. He had promoted its "supercycle" thesis almost to the very end before admitting it was "regrettably wrong," then followed the crash with a widely mocked remark that it had all happened "with zero need for govt bailouts." The irony is that Three Arrows itself is now the one needing rescue, with creditors scrambling for a lifeline — an opening Alameda Research has moved quickly to fill.

Voyager's bet on Alameda

Just before rumors about Three Arrows' troubles started circulating, Voyager Digital published a thread insisting that "transparency is a core part of our ethos," describing a "straightforward, low-risk approach to asset management," and claiming it had "the experience to back our decisions and weather any bear market."

Two days later, on Wednesday, Voyager announced a facility from Alameda worth $200 million in cash plus 15,000 BTC — a package worth more than $300 million — meant to help meet "customer liquidity needs." Alameda was a logical counterparty: it had bought 15 million Voyager shares the previous week, making it the company's largest shareholder.

The same announcement disclosed that Voyager had $350 million and 15,250 BTC in loans outstanding to Three Arrows — worth roughly $1.1 billion at the time — at interest rates ranging from 1% to 9%. What Three Arrows actually did with that capital is unclear, and may stay that way. The fund has until Monday to repay the more than $650 million it owes before being declared in default, though with Su and Davies reportedly shopping for a bailout of their own, Voyager shouldn't expect quick repayment. The market has already reacted: Voyager's stock is down more than 50% since the announcement. Half a billion dollars of uncollateralized exposure to one counterparty is an odd way to describe a "low-risk" strategy.

Not the only lender under strain

Two days before Voyager's statement, BlockFi CEO Zac Prince announced a $250 million credit line from FTX to shore up the platform's balance sheet, following news the week before that an unnamed "large client" — again, no prizes for guessing who — had been liquidated after missing a margin call.

Voyager also cut its daily withdrawal limit from $25,000 to $10,000 yesterday, and reports about BlockFi's own finances have looked similarly shaky. It's worth asking whether these credit lines can actually keep either platform solvent, or whether they're simply delaying an inevitable reckoning — and how many DeFi protocols had entrusted their treasuries to Three Arrows in the first place.

Mainstream coverage has largely framed the FTX and Alameda interventions as rescues, but there's a simpler read available: Sam Bankman-Fried is buying up distressed positions and consolidating influence while rivals falter. Firms that overhired, overspent on marketing, and dealt with very public internal friction — see Coinbase's dispute with staff and the sector's broader wave of layoffs — may be watching the seeds of a CeFi power structure get planted that mirrors the "decentralised monopoly" dynamic already seen in DeFi.