Binance Exchange has deserted its already finalized deal to purchase the bankrupt Voyager Exchange for $1 Billion. It reportedly blamed the challenging crypto regulations in the US for its sudden decision.
According to the report, the United State branch of the world’s biggest and leading crypto-decentralized exchange, Binance.US revealed the announcement on its official Twitter page. The exchange tweeted that it has decided to jettison its deal to purchase Voyager Digital for $1.3 billion.
Explaining further, the exchange tweeted that it indeed hoped to help the bankrupt lender and its customers out of their tight predicament by proposing the purchase deal. However, the hostile and ambiguous crypto regulations that prevail in the US have created an unpredictable operating system.
Consequently, the entire business community of the US would be negatively affected by the regulation-mired ecosystem. Hence, the major reason why it is backing out of the purchase deal abruptly with immediate effect.
Binance.US Halt Voyager Deal Amidst Fear Of Uncertain US Regulations
Confirming the news, the bankrupt Voyager Digital also tweeted that Binance.US sent it a termination letter concerning the deal on their asset. While expressing its disappointment over the sudden turn of events, Voyager remains confident about refunding its customers according to its Chapter 11 bankruptcy plans. The collapsed crypto exchange said it would continue with its plans of direct distribution to repay its clients. In addition, Voyager promised to keep its customers updated on necessary actions they need to take in due time.
In December, when Binance.US first made the buying proposal, it offered to purchase the crumbled firm for $1.3 billion. But in an actual sense, Binance wanted to buy the firm for $20 million. The remaining money in the deal would be used to repay the victims of the bankruptcy. Had the deal gone through, each Voyager victim would have regained about 73% of their lost assets.
Interestingly, some crypto speculators tweeted that Binance.US might have abandoned the deal due to the upcoming case it has with the Commodity Futures Trading Commission (CFTC).
The regulator had earlier charged Binance to court for illegally selling crypto-related products without proper registration. Responding to the speculation, Changpeng Zhao, the CEO of Binance, posted a shrugging emoji.
SEC and Others initially Motioned To Stop The Deal
In July 2022, Voyager Dogital, a crypto broker filed for Chapter 11 Bankruptcy. Many larger crypto firms bid to buy the remnant of the bankrupt firm, of which Binance and FTX exchanges were top bidders.
In October, the court approved FTX to go ahead and acquire the bankrupt Voyager. Unfortunately, FTX suddenly collapsed after it won the bid. The FTC collapse brought Binance back into the game.
Shortly after, the US government recently approved the proposal from Binance.US to acquire the insolvent cryptocurrency lender firm, Voyage Digital. The court approved it shortly after the New York financial authority and the Securities and Exchange Commission reportedly motioned to stop the deal.
According to the SEC, Binance might violate the regulations that guide the offer and sale of unregistered securities by buying the bankrupt Voyager. In addition, the crypto transactions needed to rebalance the firm could violate the Securities laws against delivery after the sale of unregistered securities, as per the SEC.
Furthermore, the New York financial authority and Letitia James, the Attorney General of NY City disapproved of the deal. They claimed that Voyager’s operation in the country was illegal as it offered crypto-related services without obtaining necessary licenses.