Binance Affiliate Poised to Acquire Stricken Voyager for $1B

Binance.US, an affiliate of the No. 1 crypto exchange, has won the bidding for Voyager Digital, the digital assets company that went bankrupt in July, the company said on Monday.

Voyager said the $1B bid was “the fair market value” for its cryptocurrency portfolio plus “additional consideration equal to $20 million of incremental value.” Binance.US will also make a $10M “good faith deposit” to Voyager and will reimburse the firm for particular expenses up to $15M.

Creditor Vote

Binance.US, also known as BAM Trading Services, is a California-based centralized cryptocurrency exchange that has a licensing agreement with leading CEX, Binance.

The deal must now be approved by the bankruptcy court handling Voyager’s proceedings. A court hearing to review the bid is scheduled for Jan. 5. If approved, the agreement will be submitted to vote by Voyager’s creditors as part of the defunct exchange’s Chapter 11 bankruptcy proceedings.

Voyager Digital filed for bankruptcy after Three Arrows Capital, the $10B crypto hedge fund that imploded after Terra’s collapse in May, defaulted on 15,250 Bitcoin and 350M USDC it borrowed from Voyager in March. The assets were worth $1B at the time.

Voyager’s claims against Three Arrows Capital will remain with the bankruptcy estate as part of the deal with Binance.US. “Any future recovery on these and other non-released claims will be distributed to the estate’s creditors,” Voyager said.

What Was Terra?

The $60B Fall of Terra Worsened the Bear Market and Undermined DeFi

The Defiant

As part of its $6B loan book, Voyager also lent $377M to Alameda Research, the insolvent sister trading firm of FTX.

Binance.US came under scrutiny on Dec. 17 when it froze Tether withdrawals after its main USDT balance fell to an all-time low of $197,000. Withdrawals resumed after Binance sent 9M USDT to Binance.US, raising questions about the two firms’ connection.

In October, an investigation from Reutersreported that Changpeng Zhao, Binance’s founder and CEO, approved a plan in 2018 to “insulate” Binance from the attention of U.S. regulators by setting up a separate exchange based in America.

Clearing House

“The new exchange would draw regulators’ attention away from the main platform by serving as a ‘regulatory inquiry clearing house’,” the report said.

The U.S. Justice Department is investigating whether Binance violated the Bank Secrecy Act, according toReuters.

The act requires exchanges to register with the Treasury Department and comply with local anti-money laundering laws if it carries out “substantial” business in the U.S.