Binance.US, the U.S. affiliate of the global cryptocurrency exchange Binance, has backed out of its $1.3 billion deal to buy the assets of Voyager Digital, a Canadian crypto broker that filed for bankruptcy in July 2021.
The deal, which was announced in September 2021, was supposed to close by the end of March 2023, but faced regulatory hurdles and delays. Binance.US cited a “hostile and uncertain regulatory climate in the United States” as the reason for terminating the agreement.
Voyager Digital had over 1.7 million customers and $2.4 billion in assets under management before it collapsed due to a series of frauds and hacks that resulted in losses of over $200 million. The company had hoped to sell its assets to Binance.US and use the proceeds to compensate its creditors and customers.
However, the deal faced opposition from several U.S. regulators, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the New York Attorney General’s Office, who argued that it would violate antitrust laws and harm consumer protection.
Binance.US said it decided to withdraw its offer after “careful consideration of all relevant factors” and that it remains committed to serving its customers and expanding its business in the U.S. market.
Voyager Digital said it was “surprised” by Binance.US’s decision and that it will seek to directly distribute funds to its customers as part of its Chapter 11 bankruptcy plan. The company said it has a “toggle option” that allows it to pay its creditors and customers in cash or crypto, depending on their preference.
The termination of the deal is a setback for both Binance.US and Voyager Digital, as well as for the crypto industry in general, which has been facing increased scrutiny and regulation from authorities around the world. Binance.US is one of the largest crypto exchanges in the U.S., with over 2 million users and $15 billion in trading volume. Voyager Digital was one of the fastest-growing crypto brokers in North America, with over 60 digital assets available for trading.
The deal was also seen as a potential way for Binance.US to distance itself from its parent company Binance, which has been under investigation by several regulators, including the CFTC, for allegedly offering illegal crypto derivatives to U.S. customers. Binance has denied any wrongdoing and said it complies with all applicable laws and regulations.