Binance US, the American arm of the world’s largest cryptocurrency exchange, has terminated its agreement to purchase digital assets from Voyager Digital, a bankrupt crypto brokerage, for $1 billion. The decision comes just a week after US federal regulators dropped their efforts to block the deal.
Binance.US did not provide a specific reason for its decision, but suggested that regulatory hostility may have played a role. In a tweet, the company stated that
“The hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community.”
Voyager Digital filed for bankruptcy last July after the collapse of Terra-Luna, which sent shockwaves through the entire cryptocurrency industry. Prior to its bankruptcy filing, Voyager had sent a notice of default to Singapore-based Three Arrows Capital for failing to make payments on a crypto loan of over $650 million. Three Arrows Capital is now being liquidated.
Other cryptocurrency companies rushed to purchase Voyager’s discounted crypto assets following its collapse. FTX US initially won the bid to procure the digital assets of Voyager, but the exchange and its Bahamas-based parent company collapsed soon after due to the ill-business practices of Sam Bankman-Fried. Binance.US subsequently outbid other players to acquire Voyager’s assets, but faced regulatory backlash.
The official Twitter accounts of Voyager and its committee of unsecured creditors expressed their disappointment with Binance.US’s abrupt decision to withdraw from the deal.
“While this development is disappointing, our chapter 11 plan allows for direct distribution of cash and crypto to customers (a ‘toggle option’) via the Voyager platform,” Voyager tweeted.
“Consistent with the plan, we will now move swiftly to return value to customers via direct distributions. We will provide more information on next steps and any actions customers need to take in the coming days. In the meantime, the Committee and Voyager are focused on promptly exercising the toggle option under the Plan to move forward immediately with a self-liquidation.”
Binance’s decision to withdraw from the deal is likely to further shake confidence in the cryptocurrency industry, which has already been hit hard by the collapse of several high-profile exchanges and the ongoing regulatory crackdown. While some observers have suggested that the cryptocurrency market may be approaching a turning point, others believe that the industry will continue to face significant challenges in the months and years ahead as regulators and lawmakers attempt to rein in the Wild West atmosphere that has characterized much of the sector to date.
As regulators and other stakeholders attempt to grapple with the complexities of the cryptocurrency market, it is clear that there are still many questions to be answered and much work to be done before the industry can be considered truly stable and secure. Nevertheless, the continuing interest in cryptocurrencies and blockchain technology suggests that there is still significant potential for innovation and growth in this dynamic and rapidly-evolving sector.
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