Crypto firm Voyager Digital to sell assets worth $1.02 bn to Binance.US

Bankrupt crypto lender Voyager Digital will sell its assets worth $1.02 billion to Binance.US, the American subsidiary of crypto exchange Binance, the company said in a statement on Monday. Binance.US, also known as BAM Trading Services Inc, emerged as the highest bidder in a bid by Voyager Digital to sell its assets. The development comes at the heels of the dramatic collapse of the world’s second-largest crypto exchange FTX, which filed for bankruptcy last month, weeks after winning the bid to buy the assets of Voyager Digital.

Palo Alto-headquartered Binance.US, which operates as an independent legal entity has a licensing agreement with the crypto exchange Binance, will make a good faith deposit worth $10 million, and will reimburse Voyager for certain expenses up to a maximum of $15 million. The purchase price includes $20 million, payments to Voyager’s customers and $1 billion as payments to Voyager’s clients. 

“Should the deal not close by April 18, 2023 subject to a one-month extension, the agreement allows Voyager to immediately move to return value to customers,” the company said in a statement.

“Voyager Digital LLC will seek Bankruptcy Court approval to enter into the asset purchase agreement between Voyager Digital LLC and Binance.US at a hearing on January 5, 2023,” the company added. The company filed for bankruptcy in July this year, after the hedge fund Three Arrow Capital defaulted on loans extended by Voyager.

In September, the embattled crypto exchange FTX won an auction to acquire Voyager Digital’s assets worth $1.42 billion. The bid, which comprised $1.31 billion worth of Voyager’s cryptocurrency and an additional $111 million, was aimed to help the crypto firm with bankruptcy and protect Voyager’s customers and clients. However, the acquisition fell through owing to FTX fallout.

Kirkland & Ellis LLP, Moelis & Company LLC and Berkeley Research Group are the advisors of Voyager Digital, whereas Latham & Watkins LLP emerged as the advisor of Finance.US. 

Last week, FTX’s former CEO Sam Bankman-Fried, who is also touted as the “crypto king”, was arrested in Newyork. A case has been filed by the US Department of Justice and the Securities and Exchange Commission (SEC) for cheating the FTX investors and misusing the exchange’s funds by directing the cash to his trading firm Alameda Research. He has been charged in the US for eight counts which includes conspiracy, wire fraud and money laundering and is likely to face extradition to the US.  

Last month, the crypto exchange BlockFi Inc and eight of its affiliates filed for bankruptcy as a knee-jerk reaction to FTX fallout. Through the bankruptcy, the company has sought protection to restructure, settle its debts and recover money from investors. BlockFi has more than 1,00,000 creditors with liabilities and assets ranging from $1 billion to $10 billion. 

 FTX-US, which is a US-based subsidiary of FTX, is the second-largest creditor of BlockFi and has extended a loan worth $275 million to the company. Another crypto exchange, Japan-based Bitfront, has decided to shut shop in the next few months, owing to huge competition in the rapidly-growing crypto industry. It has suspended new signups and credit card payments.