Binance US ends US$1 billion deal to buy bankrupt crypto firm Voyager
BINANCE.US terminated an agreement to purchase the bankrupt crypto broker Voyager Digital Holdings, less than a week after federal regulators dropped their efforts to halt the deal in court.
The decision came after months of wrangling and the intervention of multiple federal and state regulators over the deal. In a statement, Binance.US said, “The hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community.”
“While this development is disappointing, our Chapter 11 plan allows for direct distribution of cash and crypto to customers via the Voyager platform,” the company said on Twitter. “Consistent with the plan, we will now move swiftly to return value to customers via direct distributions. We will provide more information on the next steps and any actions customers need to take in the coming days.”
It is the second failed deal for Voyager, which has been trying to exit bankruptcy and repay its customers since filing for Chapter 11 protection last year. Voyager was among the first examples of crypto platforms that Sam Bankman-Fried tried to bail out, which at the time earned him a reputation as an industry saviour. In September, FTX US won an auction for Voyager assets in an agreement valued at about US$1.4 billion.
Mere months later, with FTX International facing bankruptcy of its own and Bankman-Fried under arrest on criminal charges, that deal collapsed. In December, Binance.US entered the fray with a proposal worth around US$1 billion at the time and that would have brought in about US$20 million in cash for creditors of the failed firm.
On Tuesday (Apr 25), Binance.US sent Voyager a four-paragraph legal notice informing the company that the transaction was being cancelled. The letter did not explain why it’s backing out, referring only to sections of the agreement that had set Apr 18 as the deadline for Voyager to close the deal.
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Binance.US had faced significant regulatory pushback on the deal, including objections from the Texas State Securities Board, the US Securities and Exchange Commission and the US Federal Trade Commission. Texas regulators expressed concerns about the independence of Binance.US from Binance.com, the global crypto exchange giant owned by Changpeng Zhao.
Voyager said it may pursue a reverse termination fee owed by Binance.US, in a court filing. In its own letter, the US exchange demanded its US$10 million deposit back within three days.
Voyager was founded in 2018 as a crypto trading platform and grew rapidly, reaching a peak of 3.5 million users and some US$6 billion worth of cryptocurrency assets, according to court records.
A string of crypto companies collapsed and entered bankruptcy proceedings last year. Crypto lender Celsius Network is facing a three-way auction set for Tuesday. Meanwhile, FTX agreed to sell LedgerX, its crypto-derivatives platform, to the owner of the Miami International Securities Exchange for about US$50 million, pending court approval. BLOOMBERG
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