Binance.US, the world's largest cryptocurrency exchange by trading volume, as per The Wall Street Journal (WSJ), has agreed to pay $1.02 billion to buy the crypto assets and client deposits of Voyager Digital.
This was decided weeks after a proposed FTX-Voyager transaction fell through due to the bankruptcy of FTX and the arrest of Sam Bankman-Fried.
Binance-Voyager Deal
After the failure of the FTX cryptocurrency exchange, Voyager began its efforts to find a buyer. Notably, FTX outperformed Binance in September.
WSJ reported that Binance.US would pay roughly $50 million to acquire Voyager's clientele in a transaction valued at $1.42 billion.
Binance.US will make an initial good faith deposit of $10 million in US dollars and a second $10 million deposit upon closing the deal, based on statements by the firm's chief exec Brian Shroder.
The press announcement on the agreement also indicates that it will pay back Voyager for some costs, up to a maximum of $15 million.
Voyager estimated the value of Binance.US' offer to be $1.022 billion. This sum includes Voyager's portfolio of cryptocurrencies, which, at present, are worth almost $1.002 billion.
According to a CNBC report, Voyager's press statement describes Binance.US' bid as "the highest and best bid for its assets after a review of strategic options with the core objective of maximizing the value returned to customers and other creditors on an expedited timeframe."
Voyager's Fall
In July 2022, Voyager Digital filed for bankruptcy protection after the cryptocurrency hedge fund Three Arrows Capital (3AC) failed to repay a substantial credit position given by Voyager.
The document said that the crypto exchange had roughly $1.3 billion in assets but was due over $650 million by 3AC, compared to $5.8 billion in assets by the end of 2021.
In August, Voyager froze all VGX token trades and transfers.
The company previously explained how customers might trade in their tokens for those of a rival network. Having lost more than 85% of its value since the beginning of the year, the token's future remained unclear.
At a US bankruptcy auction, FTX founder Sam Bankman-Fried emerged victorious. The company was planning to pay $1.4 billion to acquire Voyager.
However, it was reset to zero after FTX went bankrupt due to a withdrawal surge resembling a bank run.
Read also: CryptoWatch: FTX's Bankman-Fried Arrested, PayPals' Cryptocurrency Transactions, and Trump's NFT
Binance.US' Amid Crypto Winter
Exec Shroder told WSJ that Binance.US is actively pursuing a wide range of distressed assets, including both insolvent and near-insolvent businesses.
They have hundreds of millions of cash available, he claimed. When Binance.US received $200 million in a seed round in April, the firm's worth was $4.5 billion.
Users' mistrust in centralized crypto exchanges has been developed by the collapse of Sam Bankman-Fried's FTX, and these exchanges have hastened to promote reserves as a result.
The recent publication of a limited "proof of reserve report" by Binance has raised concerns among investors about the company's financial stability.
Shroder argued that his company's business model is radically different from FTX's.
He emphasized that the company does not engage in any kind of margin trading or client asset lending and that it instead has a strict reserve ratio of 1:1.
"Tomorrow all of our customers can withdraw their assets and we still have hundreds of millions of asset," Shroder stated. "Sam has destroyed trust, I don't expect anyone to hear from me and feel comforted."
