Binance Pulls $1B Voyager Asset Deal, Says US Has ‘Hostile’ Environment

Binance.US withdrew its $1 billion offer to buy cryptocurrency assets frozen as part of the Voyager Digital Holdings bankruptcy, citing a “hostile and uncertain regulatory climate in the United States.”

Voyager announced the termination of the agreement on Twitter Tuesday afternoon, New York time, and said the company will seek to directly compensate investors whose assets have been frozen since July, using an “exchange option” in the company’s bankruptcy plan.

The termination was confirmed by Zachary Tindall of Binance.US in an emailed statement that blamed regulators for “introducing an unpredictable operating environment that affects the entire US business community.”

There have been a number of US actions this year against digital asset businesses from various agencies, and Binance was accused by the Commodities Futures Trading Commission (CFTC) in March of offering crypto derivatives without registering as a futures trader. In a blog post at the time, Changpeng Zhao, the founder and CEO of Binance parent company — which was named in the CFTC action — said, “The complaint appears to contain an incomplete recitation of the facts, and we disagree with the characterization of many of the the alleged problems.”

Binance’s statement on Tuesday did not directly address the CFTC complaint, nor efforts by the SEC and New York State to derail the asset purchase.

Voyager, a brokerage that failed in July, part of a string of crypto-related defaults, had an earlier agreement to sell its assets to FTX US, an arm of the Bahamas-based digital asset empire that filed for bankruptcy in November. FTX had offered to repay much of the frozen assets in exchange for the ability to sign investors as new clients. The similar Binance plan involved a $20 million payment to the Voyager bankruptcy estate and a payment of around $1 billion for the frozen funds. Binance also tried to add customers by buying crypto, which would have been returned to Voyager customers.

The US SEC previously opposed the Binance transaction because Voyager’s restructuring plan did not include “necessary information about the safety of assets” and that the company failed to demonstrate that a provision to return frozen funds to investors could be made “in accordance with the federal securities laws.” The agency also said that Voyager “did not “adequately explain what safeguards are in place to ensure that customer funds are not transferred from the Binance.US platform.”

In a separate objection, the New York Department of Financial Services alleged that Voyager was registering customers in New York and “thereby illegally operating a virtual currency business in the state without a license.”

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