Binance.US has pulled out from the deal to acquire Voyager.
Binance.US, the sister company of Binance, has announced its decision to withdraw from the Voyager acquisition, citing “the hostile and uncertain regulatory climate in the United States.”
The announcement came in a tweet by Binance.US. The company also expressed regret for the move.
The $1 billion deal initially received the green light on April 19, after Voyager, the Voyager Official Committee of Unsecured Creditors, and the U.S. government reached an agreement.
However, the acquisition was temporarily blocked on March 28 due to an emergency stay granted by a judge in response to the U.S. Department of Justice’s appeal against Voyager’s bankruptcy plan.
Binance has quickly received criticism from Voyager and the Voyager Official Committee of Unsecured Creditors. The Committee stated that it is investigating potential claims against the exchange. In response, Binance.US noted that it had decided to “exercise its right to terminate the asset purchase agreement.”
Binance.US further explained that its initial intention was to assist Voyager’s customers in accessing their crypto assets.
Still, the unpredictable regulatory environment in the United States has created challenges for the entire community. Binance.US is not an exception despite its familiarity with the local regulatory landscape.
The news has stirred mixed reactions in the crypto community on Twitter. Some expressed understanding for the exchange, citing harassment from the government as a reason for its decision.
In contrast, others condemned the reversal, questioning the protection of customer information and the deal’s value.
In light of Binance.US’ decision, Voyager and the creditors’ committee have stated that they will explore alternative options, such as distributing cash and crypto assets directly to customers through the Voyager platform.
Voyager filed for bankruptcy on July 5, and the recent events have added further uncertainty to its future prospects.
Voyager initially agreed to FTX’s offer. However, FTX also declared bankruptcy, leaving the deal in the hands of Binance.US. The subsidiary of this Binance exchange agreed to save Voyage.
The Heat Is On
CZ stated earlier this month that the firm was considering backing out of its agreement due to regulatory pressure.
However, the CEO of Binance also highlighted the firm’s commitment to supporting the deal and returning funds to Voyager users if the acquisition is successful. Unfortunately, it was unsuccessful.
Since Binance.US announced its acquisition of Voyager for $1 billion in December 2022, several regulatory bodies in the United States have raised concerns and initiated investigations into the exchange’s business practices.
Notably, multiple Senators have sent letters to Binance and Binance.US, requesting clarification on their financial status and compliance with regulations.
Senators Elizabeth Warren, Chris Van Hollen, and Roger Marshall have also accused Binance of being a hub for illicit financial activities, alleging that it has facilitated the laundering of over $10 billion in illegal funds and attempted to evade punishment.
However, Binance and Binance.US have confirmed their non-illicit intention to respond promptly to the lawmakers’ inquiries.
The US Securities and Exchange Commission (SEC) has also targeted Binance and the deal. The SEC and the New York government alleged that Binance.US had displayed indications of violating US laws.
Additionally, the SEC has classified Voyager’s VGX token as a security, deeming the compensation of users as an unauthorized sale and transfer of securities.
The regulatory landscape in the United States has become an important topic of discussion on a global scale, marked by uncertainties that pose challenges for crypto companies.
The lack of clarity in regulations has resulted in a lack of a proper approach, leaving crypto companies under the constant pressure of potential lawsuits that could arise at any moment.
Recently, Brian Armstrong, the CEO of Coinbase, has publicly expressed the possibility of relocating the company to offshore locations, citing concerns about the regulatory climate in the US.
This indicates the growing impact of regulatory uncertainties on the decisions and strategies of crypto companies operating in the United States.
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Author: Nicholas Say