Binance Decided to Withdraw From the $1.3 Billion Acquisition Deal
Binance US, the American affiliate of Binance, has withdrawn from a $1.3bn restructuring deal to acquire the assets of crypto lender Voyager Digital. The decision to abandon the acquisition was due to a “hostile and uncertain regulatory climate” in the US, a spokesperson for Binance US said.
Voyager Digital entered Chapter 11 bankruptcy in July 2021 after numerous cryptocurrency firms, including Terra’s LUNA and UST tokens, collapsed last year.
The proposed acquisition was approved by a judge in March, along with the direct distribution of funds to Voyager’s customers. However, a group of regulators, including the Securities and Exchange Commission (SEC), the Federal Trade Commission, and the Texas State Securities Board, opposed the deal.
The US Attorney for the Southern District of New York, Damian Williams, also spoke out against the acquisition, describing it as “blatantly illegal.” The deal was put on hold last month, pending a decision by the US Justice Department regarding an appeal against the approval by Judge Michael Wiles.
Is the Crypto Market Safe?
The withdrawal of Binance US from the deal comes after its international affiliate, Binance, faced regulatory challenges from the Commodity Futures Trading Commission (CFTC) in March. The CFTC has accused the leading cryptocurrency exchange by volume of violating derivatives rules. The move represents another obstacle for Voyager Digital, which has been attempting to raise funds through the sale of its assets to repay its creditors. The company had initially agreed to sell its assets to FTX, but the deal fell through when FTX suffered a collapse in November 2021.
Following Binance US’s termination of the asset purchase agreement, Voyager Digital has stated that it will exercise its option to return cryptocurrency and cash directly to its customers through the Voyager platform.
Meanwhile, lawyers for Voyager have said that the company reserves all rights with respect to a $10 million good-faith deposit paid by Binance US to Voyager, as well as a reverse-termination fee owed by Binance US. The termination of the acquisition has underlined the regulatory uncertainty surrounding the cryptocurrency industry in the US, which has made some firms hesitant to operate in the market.