Illustration by Angela Zillich.
Over the last several months, cryptocurrency exchanges, including Binance, CrossTower, and the now collapsed FTX have been bidding to acquire the assets of bankrupt crypto lender Voyager Digital.
In July, Voyager Digital filed for Chapter 11 bankruptcy, becoming one of many centralized finance companies to collapse in the wake of the $LUNA collapse. The company stated that the bankruptcy filing was part of a plan to reorganize and allow clients to regain access to their accounts. This would include a recovery of up to 72% of the value of accounts, including the native $VGX token. After that, the rumors around a bidding war emerged.
In September 2022, news broke that FTX won the auction to purchase the bankrupt lender's assets. The price? $1.4 billion. However, as everyone knows, FTX announced its own bankruptcy in November 2022. As a result, the auction for Voyager's assets was reopened and various notable companies, including Coinbase (COIN) and Binance (BNB), reportedly engaged in the auction once again. Back in September, the auction process was highly competitive between the two giants, Binance and FTX. In the shade of everything else that has happened since, there hasn't been a lot of reporting on the auction and potential acquisition of Voyager Digital - until now.
Today, Palo Alto based Binance.US, the US arm of the world's largest cryptocurrency exchange, announced that it will acquire the assets of Voyager Digital (OTC:VYGVQ). The price? $1.022 billion. Significantly lower than FTX's $1.4 billion. Binance.US was chosen as the highest and best bid in Voyagers reopened bankruptcy asset auction. When the deal is closed, Voyager users will be able to seamlessly access their digital assets on the Binance.US platform, where they will continue to receive future compensation from the Voyager estate. Great news for many disgruntled investors in the space. In total, Binance are going to make a $10 million deposit and reimburse Voyager investors for up to $15 million.
"To be like the rock that the waves keep crashing over. It stands unmoved and the raging of the sea falls still around it." - Marcus Aurelius
To best answer that, it's important to understand what Voyager Digital does. Voyager Digital New York-based cryptocurrency brokerage and asset management platform on an institutional level. In addition, they're listed on the Toronto stock exchange as VYGVQ. On a side note, the stock is currently up +93.8462% on the news of Binance acquiring Voyager. As such, Voyager is a US-based publicly regulated, traded, and audited company that provides FDIC insurance.
An attractive acquisition for an exchange like Binance that is trying their hardest to push into both the institutional and regulated market. Back when they first engaged in the bidding war with FTX, there was a rumor that they were turned down partly due to their history with the US and the company and its founders background. To say the least, the relationship between the US government and Binance/CZ has been frosty for years.
Besides the regulatory and political aspects of this acquisition, Voyager is also an attractive asset in itself. They failed mainly due to overaggressive loans to 3AC (Three Arrows Capital) and the big crash following the collapse of $LUNA. But they still have tons of assets left on their books. These assets could potentially be worth a great deal more than $1.022 billion in the future. That is, if the crypto market recovers, which I think it will.
Despite Voyagers poor dealings in the past, hopefully both Binance and existing users of the broker will benefit from this deal. It's also nice with positive news amidst all the gloom and doom o these past weeks. US politicians and mainstream media may say what they want about Binance and Changpeng Zhao, but I firmly believe that they'll prove to be the rocks we all need them to be.