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Monday, May 27, 2024

The cryptocurrency company Voyager has agreed to sell its assets to Binance, US in $1 bln agreement

Following an evaluation, the cryptocurrency company Voyager Digital Ltd said on Monday that it would sell its assets to the cryptocurrency exchange Binance. US in a transaction valued at around one billion dollars.

Headquartered in Palo Alto, California Binance. US, which functions as its own distinct legal organisation and has a licence arrangement with Binance.com, will make a deposit of ten million dollars and will repay Voyager for certain expenditures, up to a maximum of fifteen million dollars. The acquisition price is comprised of $20 million and repayments to Voyager’s customers, whereas the majority of the debt that Voyager owes to consumers accounts for the $1 billion value of the company.

A value equivalent to about two trillion dollars has been wiped out of the cryptocurrency market this year due to the rise in interest rates and the escalation of concerns about an economic slowdown. As a result of the downturn, important industry companies including Three Arrows Capital and Celsius Network have disappeared.

The larger cryptocurrency exchange FTX, which had filed for bankruptcy protection the previous month, was the one that dealt the most damaging blow. Its precipitous decline has also resulted in increased regulatory scrutiny of the manner in which large exchanges store customer cash.

After filing for Chapter 11 bankruptcy protection in July, Voyager Digital announced in September that FTX had been successful in an auction for the company’s assets. The winning offer had a value of around $1.42 billion.

On Monday, Voyager announced that it would petition the Bankruptcy Court for approval of its partnership with Binance.US at a hearing scheduled for January 5, 2023.

After traders withdrawn billions of dollars from the platform in three days and rival exchange Binance abandoned a rescue arrangement, FTX filed for bankruptcy last month and Bankman-Fried stepped down as chief executive officer.

After describing a “serious liquidity issue,” FTX’s fall has given rise to further concerns over the sustainability of the cryptocurrency sector.

David Faber
David Faber
I am a Business Journalist of The National Era
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