The main point
- It's been a devastating year for Voyager Digital, as they filed for bankruptcy in July and purchased assets through FTX, only to see FTX file for bankruptcy a few months later. More than 1.7 million users are waiting to see what will happen to their funds.
- Binance.US announced in a December 19 press release that the company will buy Voyager Digital's assets for $1.022 billion in a deal that will be filed in bankruptcy court in early January.
- It was a disastrous year for cryptocurrencies starting with the collapse of the Luna network, which led to a massive bankruptcy that is still wreaking havoc on space.
In another twist in the cryptocurrency crash of 2022, Binance.US has just announced that it will acquire failed cryptocurrency exchange Voyager Digital after months of confusion. Although Voyager Digital originally filed for bankruptcy in July, there were tense moments after FTX purchased the asset in a bidding war.
Then, as we know what happened next, FTX also filed for bankruptcy.
On December 19, Voyager Digital announced that Binance.US will buy its assets for $1.022 billion in a move that will help create a clear path for Voyager customers to access their funds. We will take a closer look at Binance.US' acquisition of Voyager Digital and outline the implications for the crypto space.
What's happening in the crypto space?
We recently looked at what led to a disastrous year for cryptocurrencies and how the cryptocurrency landscape is increasingly looking like a crumbling house of cards. The cryptocurrency crash continues into the end of this year.
But recently the cryptocurrency space is looking much stronger. Around November 2021, cryptocurrency prices peaked as we saw Bitcoin move around $68,000 and Sam Bankman-Fried was dubbed the “crypto Robin Hood” ever since he revealed his plans to split his wealth.
Cryptocurrency prices then start to fall as inflation rises and central banks will respond by raising interest rates to cool the economy. Instead of being an inflation hedge, cryptocurrencies end up being just another speculative asset that fluctuates based on market conditions. Russia's invasion of Ukraine coupled with rising inflation caused cryptocurrency prices to drop further in the spring of 2022.
Just as it became clear that things were looking bad in the cryptocurrency industry, the Luna cryptocurrency network collapsed in May. It was the biggest crypto disaster in history, as an estimated $60 billion was wiped out, sending shockwaves throughout the cryptocurrency industry. Stablecoins proved to be unstable and many financial crashes followed.
Before we dive into Binance.US' acquisition of Voyager, let's take a look at some of the other fiascoes that have hit the cryptocurrency industry this year. Below is a summary of cryptocurrency exchanges and lenders that have filed for bankruptcy or suspended customer withdrawals:
- Origin
- FTP extension
- Capital three arrows
- digital traveler
- Alameda Investigations
- Fiblocks
- Celsius network
Voyager.US Acquires Binance.
Voyager sent out a tweet along with a press release on the morning of December 19 to announce that Binance.US will be buying assets from the bankrupt cryptocurrency exchange. The announcement on Twitter said: "After reviewing strategic options focused on maximizing value returns for clients over a short period of time, Binance.US has been selected as the highest and best bidder for our asset."
According to a report from Reuters, Binance.US is a separate legal entity with a licensing agreement with Binance.com. Binance.US will place a $10 million trust deposit and then reimburse Voyager up to $15 million for certain expenses. Most of Voyager's $1 billion valuation is made up of debt to customers.
Voyager also confirmed it will seek bankruptcy court approval for the Binance.US transaction at a hearing scheduled for January 5, 2023.
Brian Shroder, CEO of Binance.US, released a statement that included some good news for people hoping to access their funds frozen by Voyager due to bankruptcy:
"Once the deal closes, users will be able to seamlessly access their digital assets on the Binance.US platform, where they will continue to receive future payments from Voyager assets."
If the acquisition is approved by the bankruptcy court, there may be an end in sight for users who haven't been able to access their funds since July. We will continue to monitor the story as it develops.
So why exactly did Binance buy Voyager? Let's analyze in the next section.
What happened to Voyager?
Why did Voyager file for bankruptcy? It all started with Three Arrows Capital's default this summer, which affected the entire cryptocurrency industry. Voyager discovers that they owe Three Arrows Capital more than $660 million, leaving them no choice but to file for Chapter 11 bankruptcy.
Bankruptcy news was announced on July 6, 2022. In a Chapter 11 bankruptcy filing in the Southern District of New York, the defunct cryptocurrency exchange, along with two of its subsidiaries, said it had between $1 billion and $10 billion in dollar assets. and more than 100,000 creditors. Voyager also owes $75 million to Sam Bankman-Fried (commonly known by his initials, SBF), who previously made a $485 million injection to the company.
What is FTX's role here?
It's worth noting that Voyager filed for bankruptcy in July, while FTX only did so in November. However, SBF, the founder of FTX and Alameda Research, is strongly associated with Voyager. Voyager initially hoped to return some funds to clients by purchasing assets from FTX. FTX bought Voyager's assets in late September in a bidding war against Wave Financial, a digital asset investment firm. The winning bid at the auction was valued at approximately $1.42 billion.
However, there was another twist to a tumultuous year. When FTX filed for bankruptcy, buying Voyager's assets was no longer an option for them, and the exchange was left without suitors. If the acquisition by Binance.US is successful, we will be able to close at least one chapter of the recent crypto debacle.
How should you invest?
Since lenders and cryptocurrency exchanges are not subject to the same regulations as banks, investing your money in these digital assets can be very risky, as we have seen around $2 trillion evaporate from the cryptocurrency space.
If you are looking to invest in cryptocurrencies, you may want to consider our new technology tools, which help spread risk across industries, rather than investing in just one coin or company. If you're looking for something more stable, something less speculative, and even less affected by the current market volatility, check out the large cap kit.
Q. No need to take the guesswork out of investing. Our AI searches the market for the best investments for all types of risk tolerances and economic situations. You can activate portfolio protection at any time to protect your profits and minimize your losses, regardless of your investment sector.
end
While this could be a positive news sign as there is hope for bankrupt exchange users to gain access to their funds, there are still a lot of problems in the crypto space as we have yet to see how FTX's bankruptcy will play out. . We are not sure if cryptocurrencies will be doomed in the long term or if the industry can finally catch up. We have to admit that many retail investors have lost a lot of their hard earned money in the crypto space this year.
Download Q.ai today to access AI-powered investment strategies. When you deposit $100, we will add another $100 to your account.