Binance.US has retracted its offer of $1 billion to acquire the cryptocurrency assets that were frozen as part of Voyager Digital Holdings’ bankruptcy citing an uncertain regulatory climate in the United States that it considers hostile.
The announcement came through Voyager on Twitter saying the company will seek to directly compensate investors whose assets have been frozen since July 2022, using a ‘toggle option’ in the company’s bankruptcy plan.
1/ Today we received a letter from https://t.co/yG7Airmib5 terminating the asset purchase agreement. While this development is disappointing, our chapter 11 plan allows for direct distribution of cash and crypto to customers (a “toggle option”) via the Voyager platform.
— Voyager (@investvoyager) April 25, 2023
This announcement comes despite a US court giving the go ahead in April 2023 for Voyager and Binance.US to proceed with a deal.
Voyager Digital Holdings, a cryptocurrency brokerage company which went bankrupt in July 2022, had initially agreed to sell its assets to FTX.US, and was among a string of companies that went bust as crypto winter took root in 2022. However the deal with FTX.US fell through, and Binance.US subsequently made an offer to purchase the frozen cryptocurrency assets.
FTX had made an offer to acquire Voyager’s assets by offering to compensate a significant portion of the frozen assets with the aim of acquiring new customers through the acquisition.
Binance.US had proposed a plan to pay $20 million to Voyager’s bankruptcy estate, as well as about $1 billion for the frozen funds, in exchange for acquiring the cryptocurrency. The plan also involved using the acquisition to add new clients who would then receive the cryptocurrency that had been frozen and be returned to Voyager customers.
According to Forbes, the United States Securities Exchange Commission (SEC) had opposed the Binance transaction because Voyager’s restructuring plan did not include ‘necessary information regarding the safety of assets’ and that the company failed to demonstrate that a provision to return frozen funds to investors could be done ‘in compliance with the federal securities laws.’
At the same time, the New York Department of Financial Services alleged that Voyager signed up customers in New York and ‘thus illegally operated a virtual currency business in the state without a license.’
In March 2023, Binance was charged by the Commodities Futures Trading Commission (CFTC) of providing crypto derivatives without registering as a futures commodity merchant.
“The complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged,” said Changpeng Zhao, CEO, Binance.
The charge is part of Binance’s decision to retract its offer to purchase Voyager.
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