Much can be inferred from Binance US’s attempt to acquire the struggling company Voyager Digital. In fact, over the past period, the news has been put under the magnifying glass by many, for a variety of reasons.
The motivations for the takeover attempt? It seems that Binance US’s plan is to focus on risk management and bailing out struggling crypto companies.
Binance US and risk management
After the collapse of the FTX ecosystem, Binance’s parent company announced its commitment to allocate $2 billion to rescue the declining crypto world.
The fund appears to have actually been created but does not contain $2 billion.
According to Changpeng Zhao and Binance, about 150 companies during last year’s darkest hour applied to be helped by the rescue fund. The project, however, seems to have taken no initiative.
To date what we can approximate to something similar is a wallet called “Binance 7.” The wallet contains 1 billion BUSD, but Binance never specified whether it was the fund for the Sector Rescue Initiative.
Binance‘s promise was to support struggling industry companies by providing training, technical support, and other sources of funding. Focusing on risk management, novelty value creation, and industry sustainability.
All this still seems like a mirage.
However, a different approach seems to be taken by Binance US, which is trying to acquire, with several attempts, Voyager Digital. The idea seems to be exactly what FTX had been up to when, prior to bankruptcy, it was very intent on acquiring the struggling companies of Voyager and BlockFi.
After 11 November, though, FTX had to give up the acquisition of Voyager Digital, BlockFi, and in addition, had to freeze millions of dollars in deposits, including of major companies such as Genesis Global Trading. Setting off the domino effect that put the industry in crisis, the opposite of FTX’s initial plans.
After FTX’s crisis, Binance US stepped into Voyager Digital’s operation with a $1 billion offer. Despite various criticisms, several attempts by the SEC and the US to object, the deal seems to have come to fruition.
It does not appear that Binance US, used the funds from “wallet 7” containing the money for the industry bailout. They may possibly be disbursed later, though what matters is Binance’s intentions. The commitment to acquire a company and save it from bankruptcy, so as to get the industry back on its feet.
Sam Bankman Fried and the heavy accusations about Binance
Just when no one expected it, Sam Bankman Fried comes back to speak out in an interview on Substack. In the article he talks about his crypto empire and how it collapsed, blaming mainly the crypto exchange Binance.
“FTX Pre-Mortem Overview,” this is the title of the published article, where there are unpublished statements by SBF about FTX, his group, and the collapse:
“In November 2022 there was a rapid and purposeful collapse caused by the CEO of Binance that rendered Alameda insolvent.”
adding that the contagion from Alameda then spread to FTX and other companies.
As can be read, the attack on Binance is straightforward, the statements are very crystal clear, and it is possible to infer anger on the part of SBF.
In addition, Sam Bankman Fried stated that Changpeng Zhao, CEO of Binance, was specifically targeting the collapse of the platform.
In fact, according to SBF, CZ led the exchange to collapse through an extremely effective public relations campaign against FTX for months, all the way back to November.
This is Sam Bankman Fried’s idea, even though the whole industry, including his company’s new managers, think he did a horrible job of managing client funds. FTX’s lawyer, in favor of this thesis, made a statement toward SBF and its heyday:
“Alameda bought planes, houses, threw parties, made political donations. It provided personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula 1 team, League of Legends, Coachella and many other businesses, events and people.”
John J Ray III, the new CEO of FTX also explained his side of the story, confidently stating that the company he now administers failed due to the management of a group of unskilled individuals.
Meanwhile, FTX’s new management recently disclosed that it has recovered over $5 billion in cash and liquidity, which can be used to repay creditors.
So while Sam Bankman Fried’s words sound so confident, it is clearly just an attempt to redeem himself. He, along with his management team, were the cause of the collapse of the FTX ecosystem and consequently the sectoral crisis that occurred thereafter.
Even though Binance was not an admirer of FTX in the first place, it was not the exchange platform that caused the FTX empire to collapse.
What caused FTX and Alameda Research to implode and Sam Bankman Fried and his executives to be arrested were bad decisions made by them. The mansions, the planes, the arenas, the political financing, all of which was money spent through client investments.
Right now, with Sam Bankman Fried under indictment, the right person is paying for the right crime.