Less than a week after federal officials decided not to pursue legal action to block the transaction, Binance.US cancelled a contract to buy the insolvent cryptocurrency broker Voyager Digital Holdings Ltd.
After months of argument and the involvement of numerous federal and state officials in the purchase, the decision was made. The unwelcoming and ambiguous regulatory environment in the United States, according to a statement from Binance.US, has created an unpredictable operating environment that has an influence on the whole American business sector.
Although this development is regrettable, the company noted on Twitter that its Chapter 11 plan permits direct distribution of cash and cryptocurrency to consumers via the Voyager platform. They will now act quickly to deliver value to clients through direct distributions in accordance with the plan. In the upcoming days, they will give clients further details about the next steps to take and any necessary activities.
Voyager has been attempting to emerge from bankruptcy and compensate its clients ever since applying for Chapter 11 protection last year. This is the company’s second unsuccessful settlement. Sam Bankman-Fried fought to save Voyager, which at the time gave him the reputation of saving the sector. FTX US won an auction for Voyager assets in September with a deal worth around $1.4 billion.
Just a few months later, that deal fell through because FTX International was on the verge of bankruptcy and Bankman-Fried was being held on suspicion of criminal activity. Binance.US entered the fray in December with a bid that was valued at roughly $1 billion at the time and would have provided the creditors of the failing company with about $20 million in cash.
The transaction was cancelled on Tuesday, and Binance.US informed Voyager of this in a four-paragraph legal notification. The letter solely referred to the provisions of the agreement that had established April 18 as the deadline for Voyager to complete the deal, without elaborating on why it is pulling out.
Significant regulatory opposition to the purchase was encountered by Binance.US, with the Texas State Securities Board, the US Securities and Exchange Commission, and the US Federal Trade Commission all raising concerns. The independence of Binance.US from Binance.com, the enormous global cryptocurrency exchange owned by Changpeng Zhao, has raised worries among Texas officials.
In a court filing, Voyager stated that it might pursue a reverse termination fee that Binance.US owes. The US exchange sought its $10 million deposit back within three days in its own letter.
According to court documents, Voyager was established in 2018 as a platform for cryptocurrency trading. It expanded quickly, peaking at 3.5 million members and $6 billion worth of crypto assets.
Several cryptocurrency businesses failed and filed for bankruptcy last year. On Tuesday, a three-way auction will be held for cryptocurrency lender Celsius Network Ltd. LedgerX, FTX’s platform for cryptocurrency derivatives, was up for sale to Miami International Securities Exchange’s owner for about $50 million while it was awaiting court approval.
Voyager Digital Holdings Inc. is bankrupt; the case number is 22-10943; it was filed in the Manhattan division of the Southern District of New York.
