Binance acquires Voyager Digital – The Cryptonomist

The tweet reporting the news is only a few hours old: Binance, a company whose CEO is Changpeng Zhao, has obtained court approval to acquire Voyager Digital, the crypto broker that had filed for bankruptcy in July. 

Watcher.Guru’s official Twitter profile reads: 

JUST IN: #Binance gains court approval to acquire bankrupt crypto lender Voyager Digital.

— Watcher.Guru (@WatcherGuru) January 10, 2023

Voyager will sell its crypto platform to Binance

As anticipated, cryptocurrency broker Voyager Digital filed for bankruptcy in July due to difficult market conditions. In that circumstance, a number of companies had lined up to save Voyager from insolvency. 

These included FTX, now bankrupt since November, as one of the main contenders. However, the US wing of Binance managed to get court approval for the same.

Today, Bloomberg revealed that Voyager will sell its crypto platform to Binance for $20 million. However, this is an initial approval coming from the bankruptcy judge. 

In fact, Judge Michael Wiles of the Bankruptcy Court for the Southern District of New York approved disclosure statements explaining various aspects of the sale plan during a hearing Tuesday afternoon. However, he asked the lawyers involved to review the proposed documents before affixing his final approval.

The agreement will be subject to another confirmation hearing in March and will still have to be first validated by a majority of Voyager’s creditors.

Indeed, in order to be called complete, the deal will need the green signal from creditors and final approval from the court. Before Judge Wiles fully accepts the associated bankruptcy liquidation plan, the agreement cannot be finalized.

Under the terms of the agreement, Binance will assume ownership of the assets Voyager holds on behalf of its customers, to the tune of $1 billion. Thereafter, account holders will have the opportunity to withdraw their funds. 

Sussborg and Okike: Voyager Digital’s statements

Joshua Sussborg, the attorney with the Kirkland & Ellis law firm representing Voyager Digital, said at the beginning of the hearing that the settlement with Binance US is certainly in the best interest of the company’s creditors: 

“We don’t want to delay getting money and cryptocurrencies back into the hands of our customers. We also carefully considered the possibility of self-liquidation, but realized it would not be the best option for our clients.”

Voyager’s attorney, Christine A. Okike, also stressed the importance of clients in this case. In fact, the lawyer said that clients will have the right to vote on the Binance deal in the next two weeks. 

Okike also stated at the hearing that the lawyers resolved for today’s purposes the objections raised by the SEC and the state of New Jersey. According to the lawyer, in fact, the debtors claim to have performed due diligence on Binance US, whose financial statements show that there is enough liquidity to pay up to $35 million in cash, which is the maximum amount owed.

Binance-Voyager deal: why did many oppose it?

Voyager’s deal with Binance has attracted many opponents since it was proposed. Among them, we see the US Securities and Exchange Commission (SEC), the Department of Justice (DoJ) along with financial authorities in New York, Texas and Vermont. 

Despite being closely scrutinized, FTX’s Alameda Research also condemned this deal. Voyager, in its defense, labeled the objections of most as “hypocrisy and boldface” based on unverified speculation, as stated in court: 

“Raising objections to the disclosure statement based on unsubstantiated and unverified media reports while ignoring material information already made available to objectors is a blatant attempt to undermine the Binance.US transaction and attack Binance.US.”

In addition, the cryptocurrency exchange also addressed why it was part of the Alameda FTX Loan Facility. Indeed, they continued claiming that FTX’s attempt to acquire Voyager was a last-ditch effort to cover the gaps in their balance sheet caused by their ” apparent fraud.” Voyager entered the Alameda FTX loan only on the basis of Alameda FTX’s fraudulent and false statements, the company claimed.

In any case, Wiles did in fact dismiss the concerns expressed by the aforementioned entities. The bankruptcy judge said he will approve a final order after making some minor changes to the wording. This will allow Voyager to sign a contract with Binance and submit a summary of the agreement and liquidation plan to creditors for a vote.

In addition, Voyager currently has 1.2 million customers and $1 billion in assets on its crypto platform. This data, the judge confirmed, will remain as is until the bankruptcy case reaches a conclusion.