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Voyager suspends trading, deposits, withdrawals, and loyalty rewards

investvoyager.com

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Re: Voyager suspends trading, deposits, withdrawals, and loyalty rewards

#131

Post by jcranmer »

TedDoesntTalk wrote: post #109
Barrera wrote: post #80

> We are in discussions with various parties regarding additional liquidity and the go-forward strategy for the company. While we don’t have anything else to share today, we are working diligently and hope to have more information to share soon. Translation: we are insolvent. The action we have taken prevents a run that will wipe out our working capital. We have been running a fractional reserve all along. This is ge…

> We have been running a fractional reserve all along How do you know that? It’s possible 3 Arrows missed their loan payments and that was enough to prevent them from meeting liquidity demands, no?

If loans were a component of Voyager's reserves, then by definition, Voyager was employing fractional reserve banking.

It's even more amusing that you think this crisis being caused by failed loan payments doesn't mean that fractional reserves are in play, because backing deposits with loans in lieu of cash is literally the textbook example used to illustrate fractional reserve banking.

Re: Voyager suspends trading, deposits, withdrawals, and loyalty rewards

#132

Post by knowaveragejoe »

chx wrote: post #70

Reminder: all crypto"currencies" are a scam. It never was and for the foreseeable future it can not be anything else. https://news.ycombinator.com/item?id=31462469

By this description, any speculative investing is a "scam". Kind of devalues the term "scam" IMO.

Re: Voyager suspends trading, deposits, withdrawals, and loyalty rewards

#134

Post by asdff »

sdfhdhjdw3 wrote: post #2

I guess everyone's strategy in the crypto space is put everything you have on bitcoin and hope it goes up. It's a really good strategy, when it works.

Even better strategy imo is considering market caps alone. Dump money into the top x coins by market cap and the intertia will carry you. Whenever crypto dumps people say its the end, but get real. This is more speculative than the lottery for a lot of people. It will always have its lemmings and grifters pumping it back up after a dump. Just ride the tide. Buy low, wait, sell high, wait, buy low. Don't put all your eggs in one basket but throwing an egg or two around at these things isn't going to hurt you any if you are an otherwise responsible investor. I certainly wish I threw one of my eggs at bitcoin when I first learned of it when it was <$1, I wish I didn't cash out my measly holdings when it was ~$4k; but I won't be making these mistakes again. Now I throw a couple bucks a month into these things that legitimately have a nonzero chance of exploding. Why not? Entrees are $15 these days; whats $10 a week burned on essentially lottery tickets with better odds? I hate everything about crypto and don't see a point to it, but at this point in my life I realize sometimes you have to play the game that is given even if you don't agree with the rules because you don't have any actual sway in this world.

Re: Voyager suspends trading, deposits, withdrawals, and loyalty rewards

#135

Post by marcell »

roywiggins wrote: post #47
marcell wrote: post #28

Earlier quoted context omitted.

Tether's market cap dropping without a price drop is indication that they are liquid and able to handle (to date) almost $20 billion in withdrawal over a 1 month period. That is impressive and a sign of their robustness. They are passing a stress test so far. Their blog counters much of the FUD out there: https://tether.to/en/news/

It seems like it would be pretty binary. That is, withdrawals would be orderly... until they are suddenly not . It's not very good evidence for the state of their backing now . Maybe they've chewed through all their liquid assets and will explode tomorrow, maybe not. That is, withdrawals wouldn't shake the Tether price at all until someone is told "no you can't withdraw today" and decides to sell their Tethers on the…

That’s an often stated truism that is false.

You could have a situation where Tether is 80% capitalized, in which case one USDT is worth $0.80.

Or a situation where they have money locked in Treasury bonds for 1 year. In that case, the value of USDT depends on your discount rate and is around $0.95.

Re: Voyager suspends trading, deposits, withdrawals, and loyalty rewards

#136

Post by jcranmer »

armchairhacker wrote: post #12

I saw this on their site: > FDIC INSURED ON USD $250,000 > You USD is held by our banking partner, Metropolitan Commercial Bank, which is FDIC insured, so the cash you hold with Voyager is protected. So does that mean anyone with less than $250k is guaranteed their money? Is there any legal backing?

What this means for anyone who is a customer is that Voyager is having an uproarious laughing session in their private conference rooms at how gullible their customers are.

The FDIC insurance means that Voyager is guaranteed at minimum $250k of its bank account should Metropolitan Commercial Bank. That's $250k for the entire company, not per customer of Voyager [1]--if Voyager held $25m in cash in that account, that's only 1% of its cash accounts that are insured. Of course, how much of an impact that has depends on how much of its assets Voyager actually holds in cash which is likely very little.

But as a customer? You have no protection whatsoever. This reassurance is basically saying "we're protected in case of emergency; you're not."

[1] It's possible that Voyager is actually the custodian of an account in your name at Metropolitan Commercial Bank, but I think that would require your explicit signature to set up, so I doubt that it's actually in play here.

Re: Voyager suspends trading, deposits, withdrawals, and loyalty rewards

#137

Post by TedDoesntTalk »

jcranmer wrote: post #131
TedDoesntTalk wrote: post #109

Earlier quoted context omitted.

> We have been running a fractional reserve all along How do you know that? It’s possible 3 Arrows missed their loan payments and that was enough to prevent them from meeting liquidity demands, no?

If loans were a component of Voyager's reserves, then by definition, Voyager was employing fractional reserve banking. It's even more amusing that you think this crisis being caused by failed loan payments doesn't mean that fractional reserves are in play, because backing deposits with loans in lieu of cash is literally the textbook example used to illustrate fractional reserve banking.

Perhaps I just don’t understand fractional reserves.

Re: Voyager suspends trading, deposits, withdrawals, and loyalty rewards

#138

Post by Pasorrijer »

ansible wrote: post #4

I sometimes wonder if I'm the only one who just wants a bank to be a bank. I've been with the same relatively small regional bank for 30 years. I have a checking account, savings account and that's it. They've been stable this entire time, and I've never worried my money was going to disappear. As another sign of being an old man, I'm old enough to remember the phrase "as safe as money in the bank". You see, when I w…

This is a very American thing. As much as our Canadian banks gouge us, and lead to a lack of choice and almost monopolistic conditions... Our banking system is so ridiculously stable compared to the US it's not even funny. I look down south in confusion because I just don't understand how you manage in your system

Re: Voyager suspends trading, deposits, withdrawals, and loyalty rewards

#139

Post by sjtindell »

ansible wrote: post #4

I sometimes wonder if I'm the only one who just wants a bank to be a bank. I've been with the same relatively small regional bank for 30 years. I have a checking account, savings account and that's it. They've been stable this entire time, and I've never worried my money was going to disappear. As another sign of being an old man, I'm old enough to remember the phrase "as safe as money in the bank". You see, when I w…

Personally I think this is an artifact of a time when there were other ways for you to make money.

Re: Voyager suspends trading, deposits, withdrawals, and loyalty rewards

#140

Post by jcranmer »

smoe wrote: post #43
iancarroll wrote: post #32

Earlier quoted context omitted.

If FDIC insurance is applicable, though, that should mean your cash is being held in your name with the underlying bank. It is unlikely that Voyager would have any right to those assets upon bankruptcy or insolvency -- if they do (I am no expert), that would destroy the neobank model to some extent. > Voyager maintains an agreement with the Bank whereby the Bank provides all services associated with the movement of a…

I'm not an expert at all either, just mildly interested how this will play out. I don't have any money in it. There is an ongoing discussion about it on the Voyager subreddit https://www.reddit.com/r/Invest_Voyager/comments/vp8kdq/prep... Some people there say they have called the FDIC, but the response they have gotten is that the insurance only kicks in if the Metropolitan Commercial Bank fails. I have no idea what…

> I have no idea what happens to the customer accounts at the bank in case of a Voyager bankruptcy. E.g. if they can be used to cover voyagers debt or have to be handed over to the customers.

Most likely, the customers are unsecured creditors to Voyager, which means they're at the back of line for getting claims on those assets.

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