This week troubled crypto brokerage company Voyager finally found a savior in Binance.US, the American franchise of the popular crypto exchange, Binance. Reports state that Binance.US agreed to fork out $1.02 billion for the crypto assets of the bankrupt Voyager.
However, a statement by Voyager implied that Binance.US will not exactly pay $1.02 billion for the assets. Binance.US will transfer $20 million to Voyager. And according to a press release, the rest of the fee will come from “the current market prices for its assets.” This means that the true value of the assets will be determined in the future.
Here’s what the release said,
The Binance.US bid….. is valued at approximately $1.022 billion and is comprised of (i) the fair market value of Voyager’s cryptocurrency portfolio at a to-be-determined date in the future, which at current market prices is estimated to be $1.002 billion, plus (ii) additional consideration equal to $20 million of incremental value.
The deal is not complete yet. It is still subject to the approval of the bankruptcy court which will decide the share allocated to each account. However, there is a good way to view the arrangement. The $20 million that Binance.US will spend is the price for the right to buy 3.5 million of Voyager’s user accounts. If the funds are successfully distributed to clients, then Binance.US bears the full task of maintaining the users and their assets.
A hearing has been scheduled for January 5 where Voyager will request permission from the bankruptcy court to sign the asset purchase deal. The purchase will also be governed by a Chapter 11 plan, which is up for a vote among creditors. Sources also claim that Binance.US will not receive any funds until March 2023.
The Deal Has Similarities With the FTX September Deal
In September, FTX.US won the bids to acquire Voyager’s crypto assets. However, the series of unfortunate events that plagued FTX put a stop to that deal. Interestingly, Binance took part in the summer auction. It offered to purchase the assets for $50 million. But, FTX.US’ bid eventually got accepted.
FTX.US was to make a $51 million payment to Voyager in exchange for transferring what was then valued at $1.422 billion in cryptocurrency to FTX. Now, Voyager’s arrangement with Binance.US has a similar structure to that with FTX.US.
Binance.US’s ambition to acquire Voyager’s assets is all part of its grand plan to grow and attract clients following its recent decision to scrap trading fees on ether and bitcoin. This is, in essence, a plan to buy Voyager’s book of business (the client accounts).
The Binance.US bid also means that creditors are on the verge of seeing some of their funds returned. Binance.US president and CEO Brian Schroder noted that “Voyager users will finally be able to access their digital assets on the Binance.US platform.” Schroder added that the goal was to “return users their cryptocurrency on the fastest timeline possible.”
2/ We hope our selection brings to an end a painful bankruptcy process which saw customers unfairly dragged into it at no fault of their own. Our goal is simple: return users their cryptocurrency on the fastest timeline possible
— Brian Shroder (@BrianShroder) December 19, 2022
Shroder knows that the $20 million they spend is a good investment. When they buy these accounts enough will stay as Binance.US customers to make the deal worthwhile.
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