Voyager Digital Faces Uncertainty as Binance.US Cancels $1 Billion Deal
Binance.US Cites “Uncertain Regulatory Climate” in the US as Reason for Deal Cancellation
Voyager Digital, a crypto lender that filed for bankruptcy in December, was taken by surprise when Binance.US canceled a $1 billion deal to buy its assets on Tuesday. The sudden cancellation left Voyager in a difficult position as it tries to satisfy its creditors’ demands.
Binance.US had initially made an offer for Voyager in December, but the deal was canceled on Tuesday. Citing an “uncertain regulatory climate” in the US, Binance.US pulled out of the deal, leaving Voyager to deal with the fallout.
Constant Contact with Binance.US
At a New York bankruptcy court on Wednesday, Christine Okike of law firm Kirkland & Ellis, representing Voyager, stated that the company was still in constant contact with Binance.US as recently as last week. Okike added that Voyager reserved all rights against Binance.US for breach of the deal.
Voyager’s Creditors Likely to Recover Between 40% to 65%
Okike also revealed that Voyager’s creditors were likely to recover between 40% to 65% of their holdings, depending on whether Voyager wins a parallel lawsuit involving bankrupt crypto exchange FTX and the recovery FTX offers its creditors. This is a significant setback for Voyager’s creditors, who were hoping to recover more of their holdings through the Binance.US deal.
In-Kind Distributions for Creditors
Additionally, Okike stated that Voyager intended to give creditors back their holdings in original cryptocurrency, rather than pay the cash equivalent. However, she warned that the shifting legal position from US regulators could complicate Voyager’s ability to do so.
According to Okike, the debtors are committed to providing ‘in-kind’ distributions to creditors, with regulatory restrictions and platform functionality in place. However, certain allegations have been made that may hinder the debtors’ ability to sell VGX into the market, making it untenable in some situations.
Regulatory Uncertainty Complicates Voyager’s Ability to Make In-Kind Distributions
Okike stated that the regulatory ambiguity that necessitated cash payments was limited to tokens valued at approximately $1.6 million, out of the total estate of approximately $1 billion. Voyager must now tread a challenging path forward, grappling with the aftermath of the terminated Binance.US agreement and striving to fulfill its creditors’ requirements. Additionally, the constantly evolving regulatory environment in the US has only compounded the uncertainty regarding the firm’s prospects.
In conclusion, Voyager Digital’s hopes of a $1 billion deal with Binance.US have been dashed, leaving the crypto lender facing uncertain times. The sudden cancellation of the deal has left Voyager struggling to satisfy its creditors’ demands, and the regulatory uncertainty in the US only adds to the company’s woes. Despite the setback, Voyager’s attorneys remain committed to giving creditors back their holdings in original cryptocurrency, subject to regulatory restrictions and platform functionality. It remains to be seen what the future holds for Voyager Digital, but the company will undoubtedly face significant challenges as it seeks to move forward.
Disclaimer
The information presented in this Blogpost is solely for educational and informative purposes and should not be misconstrued as investment, financial or legal advice. Cryptocurrencies are a highly unstable and speculative market and their worth is susceptible to substantial fluctuations. Therefore, it is advisable to conduct personal research and seek counsel from qualified experts before making any financial decisions.
