Cryptocurrency exchange Binance.US announced in mid-December that it would purchase the assets of bankrupt Voyager Digital for $1.022 billion. The deal will go before the courts in January, according to Forbes.
Voyager had billions of dollars’ worth of crypto at the end of 2021, but a broader market downturn and a series of bad bets, including on Three Arrows Capital and Alameda Research (FTX’s sister cryptocurrency trading firm), ate away at the firm’s available capital.
When Voyager went bankrupt, FTX purchased its assets in a bidding war — just months before FTX, too, filed for bankruptcy.
Needless to say, it has been a bad year for cryptocurrency, with prices cascading as inflation increased and the Federal Reserve hiked interest rates. Crypto emerged as a speculative asset that hinged on market conditions, and about $2 trillion has evaporated from the crypto space, Forbes reported.
Binance’s purchase, should it go through, may help customers access their funds. They haven’t been able to do so since July.
FTX and Voyager are two of seven crypto exchanges and lenders that have filed for bankruptcy or paused customer withdrawals. Genesis, Three Arrows Capital, Alameda Research, BlockFi, and Celsius Network round out the group.
Binance.US is an independent legal entity with a licensing agreement with Binance.com. According to Reuters, Binance.US will make a $10 million good-faith deposit and reimburse Voyager up to $15 million in certain expenses. The majority of Voyager's $1 billion valuation consists of the debt it owes to clients.
“Upon close of the deal, users will be able to seamlessly access their digital assets on the Binance.US platform, where they will continue to receive future disbursements from the Voyager estate,” Binance.US Chief Executive Officer Brian Schroder said in a statement.
Crypto lenders and exchanges are not regulated in the way that banks are, so many experts maintain that they are a risky investment.