Voyager-Binance Deal:-How much in crypto assets will customers recover?

YEREVAN (CoinChapter.com) — A US court, headed by Michael Wiles, the United States Bankruptcy Judge for the Southern District of New York, has allowed bankrupt crypto lender Voyager Digital to sell its assets to Binance US. The asset purchase agreement involves a $1.2 billion deal that will transfer Voyager’s customers to Binance.

In essence, the US Court has permitted Voyager to seek creditor approval for the same. However, the sale will not become final until a future court hearing, according to reports. 

Moreover, Voyager has announced that it will seek to expedite a US national security review of the deal with Binance. According to a recent Reuters report, Binance US has come under the scanner of the U.S. Committee on Foreign Investment in the United States (CFIUS).

The CFIUS is an inter-agency committee of the US government that reviews the national security implications of foreign investments in U.S. companies. Voyager is worried that the committee could block the transfer deal and wants to speed up the process. 

“We are coordinating with Binance and their attorneys to not only deal with that inquiry, but to voluntarily submit an application to move this process along,” 

Voyager attorney Joshua Sussberg is reported to have said during a court hearing.

The US Securities and Exchange Commission (SEC) had also opposed the acquisition earlier this month.

The deal, if approved, will include $20 million in cash and crypto assets to partly repay Voyager’s customers.

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The Binance-Voyager deal. Will customers recover their crypto assets?

In July 2022, Voyager Digital filed for bankruptcy. The brutal crypto summer that saw prices of digital assets tank rendered it unable to service customer withdrawals. The company announced it had commenced a voluntary Chapter 11 process in a bid to attempt a comeback after restructuring itself. 

“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,”  

Stephen Ehrlich, Chief Executive Officer of Voyager said in the announcement last year. 

Following the commencement of the proceedings in the U.S. Bankruptcy Court for the Southern District of New York, several firms came forward with offers to save Voyager from shutting down. 

One of the firms was now bankrupt cryptocurrency exchange FTX. However, as CoinChapter earlier reported, the crypto lender turned down the offer coming from Sam Bankman-Fried, the former billionaire owner of the exchange. He has since been arrested, released on bail, and continues to maintain that he is not guilty. 

In December 2022, CoinChapter reported that Binance US and Voyager had reached an acquisition agreement after the former offered “the highest and best bid for its assets”.  

The initial approval from the US Court has now paved the way for Changpeng Zhao-owned firm to acquire it. The development comes as good news for its customers, who had to bear massive losses after Voyager went bankrupt.

According to estimations by Voyager, the deal with Binance US will allow customers to recover 51% of the value of their losses. But until then, both these firms still have some hurdles to clear before the deal finalizes.