Binance finally acquires Voyager as US judge approves the deal
The American affiliate of Binance, the world’s largest crypto exchange, is one step closer to acquire the bankrupt crypto lender Voyager Digital’s assets after a bankruptcy judge today approved the deal.
Despite federal and state regulators’ objection, Judge Michael Wiles approved the proposed restructuring plan. The winning bidder will make a $10 million in “good faith deposit” and will reimburse Voyager for certain expenses up to a maximum of $15 million. Binance.US has until April 18, 2023 to finalize the acquisition, otherwise Voyager will move these additional fees to customers after a one-month extension.
TSX-listed Voyager Digital filed for Chapter 11 bankruptcy in 2022 following the crash of major crypto tokens TerraUSD and Luna. The company, which counts more than 100,000 creditors and billions of dollars in liabilities, was caught out by the collapse of crypto hedge fund Three Arrows Capital, suffering losses of more than $650 million.
In September, FTX.US won the auction to purchase the assets of Canada’s digital assets broker with a bid of just over $1.42 billion. But the implosion of FTX and its associated entities has left the bankrupt crypto lender without a buyer. Following FTX’s collapse, Binance emerged as one of the highest bidders for Voyager Digital’s assets.
Bankruptcy administration company Stretto disclosed last week that 97% of customers, representing 98% of the total claims, voted in favor of the proposal. Of those who participated in the voting, eligible participants were divided into four categories, one for “account holder claims” who represent over $500 million worth, and three for “general unsecured claims,” representing another $3 million.
The Toronto-based firm had around 100,000 creditors and between $1 billion to $10 billion in assets. The majority of Voyager’s creditors also voted to opt their claims into a “wind-down entity,” with 65% of Class 3 Ballots and 85% of “holders of claims or interests in the non-voting classes” voted to opt in.
Despite this progress, US federal and state regulators have objected to Binance’s proposed purchase of Voyager Digital’s assets on the grounds that it may violate the country’s securities laws and registration rules.
The SEC warned that distributing Voyager’s VGX token as part of Binance US’s rescue plan may constitute the sale of an unregistered security. The agency also said the bidder could be an unregistered national securities exchange.
NYDFS and New York’s attorney general, Letitia James, also opposed the deal, alleging that Voyager was unlawfully serving customers in the state. They questioned the purported timeline for customer repayment while Binance.US is trying to gain approval in the state, where New Yorkers would have to wait six months to get their assets back.