Binance’s U.S. business, Binance.US, will spend about $1.022 billion to buy the assets and business of cryptocurrency lending firm Voyager Digital, pulling it out of bankruptcy.
Binance.US, headquartered in Palo Alto, California, operates as a separate legal entity and has a licensing agreement with Binance.com. Binance.US will pay Voyager a $10 million security deposit and reimburse Voyager up to $15 million in certain fees. The purchase price includes $20 million, plus repayments to Voyager customers, and the $1 billion valuation is mostly made up of debt owed by Voyager to customers.
According to a Binance blog post, Binance.US has finalized a contract with Voyager Digital to acquire its assets. The statement details that the acquisition “sets a clear path to unlock Voyager customers’ funds as quickly as possible.”
Nearly $2 trillion has been wiped off the value of the cryptocurrency industry this year as rising interest rates and heightened recession fears prompt a sell-off. Volatile market conditions have led to the collapse of major cryptocurrency players such as cryptocurrency hedge fund Three Arrows Capital and cryptocurrency lending company Celsius Network. However, a bigger blow came last month when cryptocurrency exchange FTX filed for Chapter 11 bankruptcy protection, triggering a scrutiny by the government of how major exchanges hold user funds.
At the end of June this year, it was reported that Voyager Digital had obtained a credit line worth US$500 million from Alameda Research, a sister trading company of FTX, but on July 1, Voyager, which was listed on the Toronto Stock Exchange, stopped trading, depositing and withdrawing funds. Voyager suffered significant losses from the Three Arrows Capital incident, which owed Voyager as much as $655 million.
On July 6, Voyager filed for Chapter 11 bankruptcy, citing a default on a Three Arrows Capital loan. By the end of July, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board sent Voyager a joint letter demanding that it cease and object to Voyager making or promoting any language on its website that said customer funds were protected by the FDIC.
Voyager Digital said in September that FTX won the auction of its assets, which were valued at approximately $1.42 billion. It follows Voyager filing for Chapter 11 bankruptcy protection in July. However, with the collapse of FTX, related acquisitions have made waves, and now it is Binance.US.
Voyager Digital issued a statement on December 19, announcing that it had selected Binance.US as the highest and best bidder with a bid of $1.022 billion.