Voyager-Binance Deal Approved by Court

After initial court approval, Voyager seeks national security review of Binance deal

Adding to the list of ambiguities amidst the recent crypto events, a court has given Voyager approval to sign a deal with Binance worth almost $1bn. However, Voyager is still seeking a positive response from a national security review of the agreement.

The court looked at the Voyager Binance deal on 10 January, as Voyager signed an "asset purchase agreement" with Binance. Michael Wiles, a US bankruptcy Judge, dealt with the proceedings.

This isn't Voyager's first time trying to sign a deal with a major crypto player. Its first attempt to sell its assets was to FTX. However, that deal was opposed by CFIUS (the Committee on Foreign Investment in the US), as FTX was in a state of bankruptcy itself and couldn't afford the deal any longer. Voyager was extremely vigilant this time to ensure the CFIUS didn't oppose this transaction with Binance.

Terms of the Voyager Binance deal

The Voyager Binance deal includes a few significant terms to keep in mind. The biggest one is that Binance would have all Voyager customers transferred to Binance. This would allow customers to withdraw and use their crypto - something they haven't been able to do with Voyager since last July.

In return, Voyager will receive $20m from Binance as a cash payment. This sale is extremely important for not just Voyager, but its ex-customers too. If the deal breaks down and CFIUS blocks the transactions, Voyager will be forced to sell off all of its crypto possessions to repay customers. This would result in a lower amount than if the Binance deal gets the go-ahead.

The company in bankruptcy estimates its customers would receive around 51% of their crypto’s worth if the Binance deal works out.

Background of Voyager’s bankruptcy

Voyager wasn't the first crypto exchange to file for bankruptcy last year. The Terra and Luna debacle was a massive hit for the crypto industry and resulted in an almost domino-like downfall for many big-name crypto players. Initially, FTX was Voyager's main candidate to sell its assets to. However, FTX was in a rut and unable to follow through with the deal. The fact that the owner of FTX was arrested amid allegations of fraud was also a red flag for Voyager’s attorneys.