Companies are continuing to pick up the pieces in the aftermath of May’s big crypto crash. One of the companies thrust into the public eye throughout this period has been Voyager Digital, one of the three major crypto investing companies bankrupted by the crash. As the company winds down its operations and prepares to part itself out to investors, though, there’s a bit more drama at hand. This week’s Voyager Digital news sees crypto exchange Binance (BNB-USD) butting heads with U.S. regulators. Meanwhile, FTX seems to be upping the ante with its own takeover bid.
Voyager Digital fell into a trap earlier in the year, but it wasn’t alone. When crypto prices plummeted overnight, it and two other sizable crypto investing companies fell into deep trouble. These companies could not repay their massive crypto loans, missing on thousands of margin calls and sinking into debt.
The result for Voyager Digital has been wild fiscal turbulence and some very angry clients. The company, in an effort to anchor its rampant volatility, froze user assets in place. These assets have remained frozen on the company’s platform since early July when it declared bankruptcy.
Throughout the bankruptcy process, these users have been hoping for a fast resolution so that they might be able to recoup their money. However, Voyager has been in no rush as it seeks out the best buyer. It even turned down an acquisition offer from FTX which would have bailed the company out in late July, calling the bid a “low-ball” offer. Last week, though, the court decided to settle things once and for all by placing Voyager’s remaining assets on auction. This week, that process is coming to a head, with two companies leading bidders and an element of drama thrown into the mix.
Voyager Digital News: Binance Slams U.S. Regulators Over Asset Sale
The Voyager Digital news this week sees the buying process closing out. The two parties emerging as front runners in the company’s sale have been identified as FTX and Binance. However, some new comments from Binance executives suggest the company doesn’t see its chances as fair.
It appears that Sam Bankman-Fried’s company FTX is continuing its summer-long pursuit of Voyager Digital. Reports last week suggested that it was the leading bidder, though the exact figure bid had been yet unknown. Whether or not it upped its previous “low-ball” bid is unknown as well.
The news continues an aggressive takeover trend for FTX, which already agreed to buy out BlockFi earlier in the summer. And according to Bankman-Fried, the company still has plenty left in the tank. He estimates that FTX holds $1 billion still to dedicate entirely to mergers and acquisitions.
Investors might be happy to see their assets on the verge of finally being unfrozen. However, Binance — another company leading the bidding war over Voyager Digital, is not going down quietly. New reports show that Binance now leads FTX slightly in the process, offering somewhere just north of $50 million for the Voyager Digital assets. And it argues that it has the U.S. government working against it as well. Binance Chief Communications Officer Patrick Hillmann is speaking out against a government committee’s request that Binance add extra money to its offer.
The court requested that Binance add extra money atop its bid in anticipation of a review by the Committee on Foreign Investment in the U.S. (CFIUS) in the event of a Binance win. The CFIUS would review the purchase, seeing as Binance is not a U.S.-based company. But, this comes just after President Joe Biden’s executive order last week which seeks to block Chinese companies from investing in American tech. And, as Hillmann points out, Binance has never before had trouble in its many other U.S. investments. The odd request and its timing after the executive order lead some to believe complications are both xenophobic and uniformed.
Binance CEO and founder Changpeng Zhao is Chinese by birth. However, the company does not have an explicit headquarters and is registered in the Cayman Islands. Zhao also holds Canadian citizenship and asserts that he is not a Chinese citizen. “Binance has never been the subject of an inquiry officially or unofficially by CFIUS,” Hillmann says. He adds that “the xenophobia underlying the very nature of us receiving [the request] is almost as shocking as the violation of confidentiality” committed through the leaking of the auction information. Neither Binance’s offer, nor FTX’s, has been accepted yet.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
