Binance US, in a $1.02 billion transaction, is set to purchase Voyager Digital’s crypto assets and client deposits, weeks after an attempt to merge FTX with Voyager failed due to FTX’s demise and Sam Bankman-Fried’s arrest. However, some doubts are evident in the development as only $20 million will be transferred to the troubled firm leaving the question of why. The remaining amount is derived from what Voyager refers to in a news release as the asset’s “current market pricing,” with the caveat that the actual worth will be determined in the future.
A more promising approach to view the agreement could be to see the $20 million Binance.US will provide as the acquisition price for the right to buy 3.5 million Voyager user accounts. It will be up to Binance.US to make an effort to maintain the users and their assets on the platform after those monies are moved and subsequently distributed to clients, which will only happen once the bankruptcy court determines the prorated part that each account will get.
What developments led to this?
After cryptocurrency hedge fund Three Arrows Capital (3AC) defaulted on a sizable loan position provided by Voyager, the company filed for bankruptcy protection in July 2022. In contrast to the $5.8 billion in assets it had at the end of 2021, the crypto exchange had only $1.3 billion in assets at the time of filing but was owed over $650 million by 3AC.
After considering its strategic choices, Voyager stated in a press statement that Binance.US’s US was the highest and best offer for its assets. This increased the worth returned to consumers and creditors as quickly as possible.
The US is ostensibly independent of global Binance. Binance was founded in 2017 by Changpeng “CZ” Zhao, the CEO of Binance. Within five months of its launch, it had above 1 million U.S. users. Eventually, Zhao would split his U.S. activities into Binance.US in 2019 to use it as a “regulatory inquiry clearing house” to snare and limit objections from federal authorities.
Over 1.7 million Voyager users awaited the fate of their cryptocurrency. Users were promised account credit and custody of some of the cryptocurrencies FTX supported when their arrangement was first announced. Like numerous other FTX acquisition targets, Voyager was put in a bind weeks later when discovering a worth billions of dollars balance sheet hole led FTX into bankruptcy.
The potential effects of Voyager’s impending purchase on Binance’s involvement in the FTX-Alameda bankruptcy are unknown. Voyager’s representatives should have replied to requests for comment right away.