Binance CEO Mulls Walking Away From Voyager Digital Buyout Deal

As more regulatory pressure hits, the Chief Executive Officer (CEO) of Binance, Changpeng Zhao is considering walking away from the proposed buyout deal of troubled crypto lender Voyager Digital. According to a Friday Twitter post by the crypto behemoth, no decision has been made but it is likely that his firm, through its United States subsidiary, may not move forward with its initial plan. 

There have been several back and forths on the acquisition of Voyager Digital by leading cryptocurrency exchange Binance. Zhao pointed out that his firm has come under serious regulatory scrutiny and crackdowns ever since it began building ties to acquire Voyager. 

After filing for Chapter 11 bankruptcy in the United States at the beginning of the first half of 2022, Voyager Digital began to seek investors.

Judge Michael Wiles of the U.S. Bankruptcy Court for the Southern District of New York approved the asset acquisition agreement. Surprisingly, the defunct exchange turned down a buyout deal from now-bankrupt FTX and its sister trading firm Alameda Research.

As part of the acquisition, FTX planned to give Voyager customers complete access to the remaining assets locked on the platform.

Then they can now decide to open a new account with FTX with an opening cash balance funded by an early distribution on a portion of their bankruptcy claims. Voyager tagged the proposition a “low-ball bid dressed up as a white knight rescue” at that time. 

Binance Bids For Voyager Digital With Over $1B

Binance indicated its interest through its U.S. subsidiary by offering $1.022 billion for the Voyager Digital assets and the latter called it the “highest and best bid for its assets”. 

A January 5th court hearing was scheduled to finalize the purchase and when the time finally came, U.S regulator Securities and Exchange Commission (SEC) objected to the buyout deal citing several discrepancies including Binance’s capability to take on such a huge deal.

Similarly, the Texas State Securities Board and the Department of Banking gave no support to the acquisition. The Texas regulator pointed out that the company’s disclosure statement that the transfer of “personally sensitive information to any party in any part of the world as required by Binance.US, and then strips the account holders of any legal recourse for any issues that may arise.”