Voyager’s $1B Binance deal approved, despite national security concerns

On Tuesday, Voyager Digital, a bankrupt crypto lender, obtained an initial court approval for the proposed $1 billion sale of its assets to Binance.US. Additionally, it announced that it would strive to hasten the U.S. national security assessment of the deal. The U.S. Bankruptcy Judge Michael Wiles in New York authorized Voyager to initiate the purchase agreement with Binance.US and gather votes from creditors on the sale, which is yet to be finalized and scheduled for a later court hearing.

Voyager attorney Joshua Sussberg stated during the court hearing on Tuesday, that Voyager is taking actions to address the concerns raised over the holidays by the U.S. Committee on Foreign Investment in the United States (CFIUS), an interagency body that examines foreign investments into U.S. companies for national security risks. He stated that Voyager intends to eliminate any issues that may lead CFIUS to disapprove of the transaction. Sussberg also added “We are coordinating with Binance and their attorneys to not only deal with that inquiry, but to voluntarily submit an application to move this process along,”

The U.S. Committee on Foreign Investment in the United States (CFIUS) had noted in a court filing on December 30th that their review “could affect the ability of the parties to complete the transactions, the timing of completion, or relevant terms.”

As mentioned by attorney Joshua Sussberg, the Binance transaction entails a $20 million cash payment and an agreement to transfer Voyager’s customers to Binance.US’s crypto exchange which would then permit withdrawals by customers for the first time since July.
Also, according to Voyager, the sale will permit customers to recover 51% of the value of their deposits at the time of Voyager’s bankruptcy filing.
However, if CFIUS prevents the transaction, Voyager would be compelled to repay customers with the crypto it has on hand, leading to a lower payout for Voyager’s users, as per Sussberg’s statement. In recent times, CFIUS has been employed by Washington to hamper Chinese investments in the United States.

Despite being owned by Changpeng Zhao, a Chinese-born Canadian citizen, Binance is headquartered in various locations and has been subject to a money laundering probe by U.S. prosecutors. Binance.US has claimed that its American exchange is fully independent of Binance main platform. Voyager’s proposed sale of its assets to Binance US, was also opposed by the U.S. Securities and Exchange Commission and state securities regulators. However, Voyager was granted permission by Judge Glenn to proceed with the sale, noting that securities regulators will be able to object to the final approval of the sale at a later date.

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