Kostyantyn Kryvopust: Binance abandons $1 billion Voyager deal, accusing it of violating US law

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Binance.US has pulled out of a $1.3 billion deal to buy bankrupt crypto lender Voyager Digital, citing a “hostile” regulatory climate in the United States.

In a tweet on Tuesday, the US unit of the cryptocurrency exchange Binance announced that it had exercised its right to terminate the asset purchase agreement with Voyager. He added:

“While throughout this process we hoped to help Voyager customers access their cryptocurrencies, the hostile and uncertain regulatory climate in the United States has created an unpredictable operating environment that has impacted the entire American business community.”

In a separate Twitter topics bankrupt crypto lender Voyager Digital announced it had received a letter from Binance.US terminating its asset purchase agreement.

“While this development is disappointing, our Chapter 11 plan allows us to directly distribute cash and cryptocurrency to customers through the Voyager platform,” the company added.

Voyager said it will continue direct distribution in an effort to return value to customers. The crypto lender said it will provide more information on the next steps and any actions customers need to take in the coming days.

Binance.US’s offer, which was originally made in December, valued Voyager at $1 billion, although the actual cash price Binance.US will have to pay is only about $20 million, in addition to payouts to Voyager’s customers.

It is estimated that Voyager users could get back 73% of the value of their deposits if the deal were to go through.

Meanwhile, some Twitter users speculated that the cancellation of the deal was related to an upcoming settlement with the Commodity Futures Trading Commission, which sued parent exchange Binance over the sale of unregistered cryptocurrency derivatives.

Chief executive Changpeng Zhao responded to the speculation with a shrug emoji.

U.S. regulators tried to block the deal despite court approval

It is noteworthy that last week the US federal government approved the exchange’s application to purchase the remaining assets of the bankrupt crypto lender Voyager Digital.

The green light from the federal government comes after US regulators, including the Securities and Exchange Commission (SEC) and New York’s financial regulator, previously tried to block the deal.

At the time, the SEC said the Voyager deal could violate unregistered securities offerings and sales laws.

Specifically, the agency said that crypto-asset transactions required for rebalancing “may violate the prohibition in Section 5 of the Securities Act of 1933 against the unregistered offer, sale, or after-sale delivery of securities.”

So is New York’s top financial regulator and New York’s attorney general, Letitia James denied against the deal, saying Voyager “unlawfully operated a virtual currency business in the state without a license.”

Voyager was a cryptocurrency broker that filed in July for Chapter 11 bankruptcy followed by a trading war between Binance and the FTX exchange.

In late October, FTX secured approval from a US bankruptcy court to acquire Voyager’s assets, but infamously collapsed shortly thereafter, bringing Binance back into the game.

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