Binance.US Says No Deal to Voyager Digital

In a surprise development, Binance.US decided to terminate its agreement to purchase Voyager Digital Holdings Ltd., the bankrupt cryptocurrency broker. The decision comes after federal regulators stopped efforts to stop the deal in court. 

Also read : Top 10 Crypto Mining Software

Voyager Digital’s Bankruptcy Woes

Voyager Digital filed for bankruptcy last year, mainly due to the dramatic fall in crypto prices. While Voyager Digital flourished in the pandemic period, it got badly affected due to the slump in crypto markets in 2022. 

Voyager Digital wasn’t the only crypto entity that ran into trouble, as both New Jersey-based Celsius and Singapore’s Vauld froze withdrawals as well. Voyager issued a default notice to Three Arrows Capital (3AC), which is a Singapore-based company. The hedge fund failed to pay over $650 million in crypto loans. 

Binance.US Initially Agreed to Acquire Voyager Digital

Voyager Digital initially received court approval to sell its assets to Binance.US for $1.022 billion (Approx.). The asset purchase agreement between the two parties was approved by US Bankruptcy Judge Michael Wiles. However, Voyager’s creditors were required to vote on the plan to give them the green signal. 

In March this year, almost 97% of its customers voted to file for bankruptcy under Chapter 11. They overwhelmingly voted in favour of the restructuring plan, which included Binance.US acquiring some of its assets. 

Binance.US Shuts Down Deal to Buy Voyager Digital

Finally, recent reports confirmed that Binance.US had shut down a deal to purchase Voyager Digital’s assets for $1.3 billion. The official reason given by the exchange was an uncertain and hostile regulatory climate in the United States. Voyager Digital has stated that it has a right to receive a reverse termination fee, along with retaining Binance.US’s good faith deposit of $10 million. 

Voyager was attempting to raise funds to repay creditors and had initially accepted an offer to sell its assets to the FTX exchange. The deal did not materialise due to the latter’s difficulties. 

While the proposed deal with Binance.US was public knowledge, it also had problems of its own. For instance, not only was the entire affair shrouded in regulatory hurdles and opposition, but a federal judge also temporarily halted the deal in April. Following the termination, Voyager Digital is set to exercise an option to return customers’ cryptocurrencies and cash directly. 

About Voyager Digital

Voyager Digital was initially a cryptocurrency brokerage platform that was created to provide access to crypto asset trading with speed, transparency, and liquidity. The company suspended almost all activities on July 1 and filed for Chapter 11 bankruptcy protection on July 5. 

The same month, the company was ordered by the FDIC and the Federal Reserve to stop making false and misleading claims. In August, the company received approval to return customer cash, amounting to $270 million. 

Binance and FTX both made bids for its acquisition, which was won by the latter. However, FTX suffered a similar bankruptcy ordeal, which jeopardised the company’s bailout. This was the point where Binance.US won the bid to acquire its assets for approximately $1 billion. 

About Binance.US

Binance.US is the United States arm of Binance for U.S.-based users. It has low trading fees compared to its nearest competitors. However, it only offers a few tokens to buy, sell, and trade and is banned in several states. 

Binance.US was created by Binance and BAM Trading Services, the former’s U.S. partner. Despite certain limitations, features such as low fees, robust trading tools, and valuable educational resources make it a decent option for United States traders. 

Binance.US prioritises security for its clients, requiring account verifications before a user can buy, sell, or trade. While the verification process takes some time, it helps prevent fraud. This has led Binance.US to be the only U.S.-based crypto platform that has never suffered a breach or hack. 

Conclusion

With both the FTX and Binance.US deals falling through, it remains to be seen what Voyager Digital will do. Numerous reports indicate it has announced its intentions to self-liquidate its assets and shut down altogether. 

Frequently Asked Questions

When Was Voyager Digital Founded?

Voyager Digital was founded in 2018 by Oscar Salazar and Stephen Ehrlich as a cryptocurrency brokerage company. 

Why Did FTX Not Acquire Voyager Digital?

FTX was poised to acquire Voyager Digital until the crypto exchange collapsed due to the liquidity crisis of the native FTT token. 

Why Did Binance.US Pull Out of the Voyager Digital Deal?

Binance US, which initially made a $1 billion offer to acquire Voyager Digital, backed out citing the United States’ hostile regulatory climate.