HomeCryptoFTX opposes Binance's acquisition of crypto lender Voyager Digital

FTX opposes Binance’s acquisition of crypto lender Voyager Digital

Many questions and objections are being raised by the affair surrounding the acquisition of crypto lender Voyager Digital by Binance.US. As we previously reported, Binance.US‘s plan is to purchase Voyager Digital’s assets for a value of $1 billion, a figure that is not acceptable to many, including FTX, which has expressed its disagreement with this acquisition. 

However, the response of cryptocurrency lender Voyager was not long in coming, calling FTX’s opposition a hypocritical opinion given the recent events that affected Sam Bankman Fried’s former company and affected the entire market. 

Even FTX is against acquisition of crypto lender Voyager Digital

The attempt by FTX and Alameda Research to oppose the sale of Voyager Digital’s assets to Binance.US joins other oppositions, such as that of the Security Exchange Commission (SEC) and a few US states.

The motivations of FTX and Alameda Research start on the basis of opposition regarding the violation of the hierarchies of creditors established by Chapter 11, the US bankruptcy law. 

But Voyager takes issue with the allegations, calling them “frivolous and meaningless,” considering also FTX’s (pre-bankruptcy) attempt to acquire the Voyager Digital company. 

Even though today, the CEO of FTX is no longer Sam Bankman Fried, Voyager’s counter-accusations concern the former CEO’s mismanagement. But John J Ray III, has made it clear that the previous mismanagement and lack of transparency in accounting records, are about the past and not about the present and future of the company of which he is CEO. 

Voyager and its committee representing creditors, said the deal they are going to support with Binance.US is the best option available to safeguard the company. An opportunity to restart in such an unstable and volatile market, also reassuring everyone that there are ways out of the deal if better options present themselves. 

The SEC is the main objector to the deal

The Security Exchange Commission (SEC) wants more information to approve the deal that sees the acquisition of Voyager Digital by Binance.US.  

Without the necessary information, the SEC does not want to approve the acquisition agreement and therefore filed a limited objection on 4 January, pointing out the lack of necessary details, for instance on Binance.US’s ability to finance the acquisition, the appearance of operations, and the assurance of asset disposition. 

The limited objection is a type of objection related only to a part of the acquisition process; it is therefore applied only to a specific part of the proceedings. 

The US regulator is demanding specific information from Binance.US regarding the acquisition and from Voyager as much information regarding even the details of what might happen if the transaction is not completed by the deadline (April 18). 

This deal is stirring up a lot in the community, with many experts expressing their opinions, which turn out to be mixed. Some analysts have speculated on deals between Binance and the United States, or deals with Binance’s parent company. 

Among them is Adam Cochran, who from his Twitter account writes:

“The SEC basically objects that Binance US cannot have assets of this size without there being some illicit arrangement (probably with parentco).

Which would mean commingling with the US entity. So if Binance objects, it risks exposure in the U.S….”

But as explained in several previous articles, Changpeng Zhao, the famous CEO of Binance, has stated several times publicly, that Binance.US is completely independent of Binance. Several voices of accusation start from these statements, and the back-and-forths are many among the various blogs and CZs. 

According to Voyager Digital, even with many objections the deal will get done

“The objections ignore the practical realities of these Chapter 11 cases and fail to identify any transaction that provides a better outcome for debtors’ creditors. There isn’t any. And time is of the essence in these chapter 11 cases.”

All the criticism does not budge the idea of Voyager executives to sell their assets to Binance.US, the decision is an exercise in sound business judgment, and the courts, SEC and other companies should respect Voyager’s wishes. 

The offer appears to be fair, consistent with the current market value of Voyager Digital’s group, and even were it lower, it is currently the best offer given the failure to acquire it at a higher price than FTX.

In the note where it announced that it had accepted the takeover offer, Voyager stated:

“Binance.Us’ offer aims to return cryptocurrencies to customers in kind, in accordance with court-approved disbursements and platform capabilities.”

Binance.US’s next move will be a good faith deposit of $10 million, reimbursing Voyager for some expenses, capped at $15 million.

If the deal with Binance.US does not materialize by 18 April 2023, Voyager has the option to move to return money to customers. 

The CEO of Binance.US posted several statements about the future acquisition and the plan to compensate customers for the blocked funds:

“We will do everything in our power to expedite the legal and judicial approval process. The current goal, pending court approvals, is to provide users with access to their assets in March 2023.”

Among the central points is to maintain transparency and security for customers, Binance’s fundamental foundations. Most importantly, capitalization is a source of peace of mind for customers:

“In addition, we maintain an industry-leading security program to protect customer funds. Binance.US is well capitalized: our assets exceed our liabilities. All of our customers could withdraw their assets tomorrow, which is their right, and we would still have hundreds of millions of current assets.”

We will see how the situation evolves in the coming days and whether the SEC and all objectors will be convinced about the issue.