Deal Greenlit by Federal Government Despite Objections
On April 19, Voyager, the Voyager Official Committee of Unsecured Creditors, and the U.S. government agreed to proceed with the deal. This came after an emergency stay granted by a judge on March 28, blocking the deal while the U.S. Department of Justice appealed Voyager’s bankruptcy plan.
However, the Securities and Exchange Commission (SEC) and New York’s financial regulator had previously attempted to halt the deal, raising concerns over potential violations of laws on unregistered offer and sale of securities.
Voyager and Creditors Express Disappointment
Both Voyager and the Voyager Official Committee of Unsecured Creditors shared their dismay at Binance.US’s decision.
1/ Around 2 hours ago, https://t.co/5sjac1H4CW purported to terminate the asset purchase agreement with Voyager. The Committee is incredibly disappointed with this decision and is investigating potential claims against https://t.co/5sjac1H4CW.
— Voyager Official Committee of Unsecured Creditors (@VoyagerUCC) April 25, 2023
In response, Binance.US said it decided to “exercise its right to terminate the asset purchase agreement.” The exchange added that the hostile regulatory environment in the U.S. has led to an unpredictable operating climate for businesses.
https://t.co/AZwoBOgsqS has made the difficult decision to exercise its right to terminate the asset purchase agreement with Voyager.
While our hope throughout this process was to help Voyager's customers access their crypto in kind, the hostile and uncertain regulatory climate…
— Binance.US 🇺🇸 (@BinanceUS) April 25, 2023
Impact on Voyager’s Customers and Future Plans
The deal’s termination has left Voyager and its creditors to pursue the “toggle option” for customer asset distribution. This involves distributing cash and crypto directly to customers through the Voyager platform.
The bankruptcy-stricken crypto lender declared that they would proceed with direct distributions in an effort to return value to their customers. Voyager Digital intends to provide additional information on the next steps and any required customer actions in the coming days.
Speculation Around Binance.US Decision
Some Twitter users speculated that Binance.US’s decision to withdraw from the deal might be related to an upcoming settlement with the Commodity Futures Trading Commission, which has sued the parent exchange Binance for selling unregistered crypto derivative products. Binance CEO Changpeng Zhao responded to the speculation with a shrugging emoji.
— CZ 🔶 BNB (@cz_binance) April 25, 2023
Previous Bidding War and FTX’s Failed Takeover
Voyager Digital filed for Chapter 11 bankruptcy in July, sparking a bidding war between Binance and FTX exchange. In October, FTX secured the approval of a U.S. bankruptcy court to take over Voyager’s assets. However, the deal collapsed soon after, putting Binance back in contention.
Why did Binance.US terminate the agreement to purchase Voyager Digital’s assets?
Binance.US cited a hostile and uncertain regulatory climate in the United States as the main reason for terminating the agreement to purchase $1 billion worth of assets from bankrupt crypto brokerage Voyager Digital.
What is the impact on Voyager Digital customers?
Voyager Digital and its creditors will pursue the “toggle option” of distributing cash and crypto directly to customers through the Voyager platform following the termination of the deal with Binance.US.
What was the speculation surrounding Binance.US’s decision to withdraw from the deal?
Some Twitter users speculated that Binance.US’s decision to withdraw from the deal might be related to an upcoming settlement with the Commodity Futures Trading Commission, which has sued the parent exchange Binance for selling unregistered crypto derivative products.
What was the previous deal between FTX and Voyager Digital?
FTX exchange had secured approval from a U.S. bankruptcy court to take over Voyager Digital’s assets in October. However, the deal collapsed soon after, allowing Binance to re-enter the bidding process.