There’s finally some good news for investors in the crypto space. After months of stagnation, there is finally news that Voyager Digital assets will be sold off. Binance’s (BNB-USD) American affiliate is receiving the go-ahead to pursue its acquisition of the bankrupt company. The news is more than a win for Binance fans or Voyager clients stuck in limbo. More so, it’s the start of a trust-building exercise that the market desperately needs to get out of its rut.
On Tuesday afternoon, Judge Michael Wiles of the U.S. bankruptcy court gave Binance.US initial approval to pursue its acquisition of Voyager Digital’s remaining assets. Binance.US had originally worked out this deal with Voyager, worth $1.02 billion, in mid-December.
This news comes as the purchase is to be reviewed by the Committee on Foreign Investment in the U.S. (CFIUS). Voyager lawyers say they are working to answer CFIUS’s questions about the transaction as it works through its review. After the review, the purchase will also need to find creditor approval and final approval from the court. The companies will also face scrutiny from the Securities and Exchange Commission (SEC), which is filing in opposition to the sale.
CFIUS has been a major heel to Binance’s past efforts to purchase Voyager Digital. In the initial auction for the assets in September of last year, Binance’s global corporation attempted to bid but was stymied by CFIUS.
Voyager Digital News Great for Restoring Trust in Crypto Companies
The news from Binance.US and Voyager Digital is great for both companies. Voyager Digital had been through the wringer after FTX (FTT-USD) won its auction and then proceeded to spiral dramatically into bankruptcy. But beyond this, it’s an indicator that major crypto companies are focusing on restoring trust with clients.
Voyager Digital froze its customers’ assets in July of 2022 when the crypto winter first started to seep in. It wasn’t nearly the first company to do so, nor the last. But, it was a highly controversial move that shook investors’ faith. These mass asset freezes didn’t just shake faith in Voyager Digital or its peers who did the same thing but in the whole industry.
Seeing these highly volatile exchanges and investing entities essentially seizing clients’ assets after they themselves plummet into bankruptcy is deeply frustrating. These investors have been eagerly waiting for an acquisition since July. And, they had to deal with the FTX rollercoaster — coming so close to recouping their assets before finding themselves right where they started.
If the crypto market hopes to get itself out of its rut, it is first going to need to find investors who want to buy. That’s a tall ask as many of these investors have started to turn away from the market entirely in the midst of the poor handling of volatility. Binance, which is seemingly doing okay, is smart to assuage these clients. If all goes well, it could kickstart a period of consolidation which will free up client assets industry-wide. Then, more stringent regulations around crypto assets and a renewed emphasis on transparency can help to prevent these freezes from occurring down the line.
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.
