Leading Crypto exchange Binance has canceled the deal for the acquisition of bankrupt crypto brokerage platform, Voyager. This comes days after the U.S government gave the exchange the green light to proceed with the deal following a little delay.
Voyager announced April 25 through its Twitter handle that the deal with Binance had been cancelled. The termination of the $1.02 billion deal was communicated via an email Binance US sent, Voyager said. In an official statement in response to the cancellation, Voyager said the action was “disappointing”.
“Today we received a letter from Binance.US terminating the asset purchase agreement. While this development is disappointing, our chapter 11 plan allows for direct distribution of cash and crypto to customers (a “toggle option”) via the Voyager platform.”
“Consistent with the plan, we will now move swiftly to return value to customers via direct distributions. We will provide more information on next steps and any actions customers need to take in the coming days,” Voyager said in the statement.
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Binance US Blames Harsh Regulatory Environment
Binance has been under heat in the U.S recently, so much so that the commodities and futures trading commission (CFTC) wants its operations terminated in the country. Binance U.S says it is such an environment of uncertainty that necessitated the termination of the deal.
“While our hope throughout this process was to help Voyager’s customers access their crypto. The hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community.”
Not only Binance, but top exchanges like Coinbase have not been spared. The exchange recently received a Wells notice from the securities and exchange commission (SEC), threatening to take regulatory action against it. It is as a result of this action that Coinbase has filed a lawsuit demanding that the SEC come up with clear regulations or stop harassing crypto companies.
Voyager to Distribute Funds to Customers
Since the deal with Binance has failed, Voyager will distribute funds to customers directly in line with the Chapter 11 plan approved in Bankruptcy Court, which allows Voyager to move forward and “return value to customers via direct distribution”.
The deal between the two companies started in late 2022 but was not concluded until early 2023. After that, the U.S SEC through the department of justice halted the process in March, but the court granted permission for the deal to proceed just last week.
This is just one of the problems with the U.S’ approach to crypto regulation and unless things improve, the industry and the investors may suffer more in the future. Already, exchanges like Coinbase are considering leaving the country while others like Bittrex have already left, and the SEC is to blame for most of the outcomes.