The United States-based subsidiary of the top crypto exchange Binance has decided to withdraw from the $1B Voyager acquisition deal. The crypto exchange company has referred to the uncertain and hostile environment to be the reason for the contract’s cancelation. On noticing this, Voyager Digital’s lawyers have become shocked.
Binance.US Cancels $1B Voyager Acquisition Contract
The respective decision was announced by the crypto exchange on Tuesday. The contract has been authorized by the bankruptcy court a few days back. As a result of this, Voyager will require giving the crypto assets as well as the cash to the consumers in line with the bankruptcy proceedings as the contract remained unsuccessful because of Binance.US’ withdrawal.
The now-defunct crypto lending platform recently shared on Twitter that a letter was received by it from the crypto exchange. The platform added that the respective letter indicated that the contract to purchase the assets in the possession of Voyager would be dismissed by Binance.US.
On Wednesday, in a Southern District Court of New York-based bankruptcy court, the lawyers suggested that the crypto exchange platform was still showing interest a few days back. As per them, the debtors have been constantly communicating with Binance.US until last Friday. Binance.US had disclosed its desire to complete the transfer in the near possible time, as stated by the law company Kirkland & Ellis’ Christine Okike who is representing Voyager.
Binance stepped back from the agreement related to the acquisition of the assets possessed by Voyager because of what it labeled as an ambiguous and unfriendly regulatory environment around the industry in the United States. After the dismissal of the contract, recoveries for the creditors of Voyager will potentially range from 40% and 65%, in the words of Okike. This relies on if Voyager remains victorious in a simultaneous lawsuit dealing with the now-bankrupt crypto exchange company FTX and the extent of recovery the exchange offers to its creditors.
In the previous year, Voyager became one among the several crypto platforms that could not endure the enormous crypto bear market following the sudden decline of the algorithmic stablecoin UST as well as the governance token LUNA of the Terra ecosystem. As a result of this huge event, Three Arrows Capital (a crypto hedge fund) defaulted on a loan of up to $650M to the crypto lender.
Keeping that in view, the crypto brokerage platform announced its bankruptcy on the 5th of July last year. In addition to this, it also determined to auction the assets possessed by it as included in a restructuring strategy. FTX turned out to be the top bidder in that case. Nevertheless, the implosion of FTX compelled Voyager to move toward some other purchaser. Hence, a $1B contract was carried out between Voyager and Binance.US.
However, the acquisition contract attracted huge opposition from regulatory organizations. The regulatory agencies made many efforts to hinder the deal between Binance.US and Voyager. With the respective contract, the Voyager clients would have been shifted to Binance.US.
Changpeng Zhao Hints that the Regulatory Pressure Might Have Led to the Deal’s Termination
The prominent regulators involved in these endeavors take into account the Securities and Exchange Commission (SEC), the Texas State Securities Board, the Texas Department of Banking, and the Federal Trade Commission. Changpeng Zhao (the CEO of Binance) commented on the new development on Twitter. He hinted that the abrupt withdrawal from the acquisition deal may have occurred because of regulatory pressure.
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