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Voyager asset sale: Will Binance, FTX honour Voyager account holder deposits?

By Darius McQuaid

14:24, 21 September 2022

Binance logo on a smartphone screen
Binance’s bid is said to be higher than FTX’s – Photo: Getty Images

Binance, the world’s largest cryptocurrency exchange by trading volume, and FTX, the cryptocurrency derivatives exchange, have made the top bids, roughly $50m (£44m) each, for the assets of Voyager Digital, the crypto lender that filed for bankruptcy in July.

This is according to what people familiar with the matter told The Wall Street Journal (WSJ). Binance’s bid is said to be higher than FTX’s. However, neither of the bids has been accepted yet.

On 15 September 2022, a court document from the United States Bankruptcy Court for the Southern District of New York revealed that on 13 September, Moelis & Company, Voyager’s investment bank, held an auction for the crypto lender’s assets.

The document said that it would not be revealed who purchased the assets until 29 September. 

Voyager’s lawyers said that there were 88 interested parties in the auction.

Why has Binance put in a higher bid?

The reason why Binance’s bid was slightly higher is due to the potential complications brought on by the US government possibly rejecting the transaction.  

Voyager is headquartered in New York and is seen as an American company, while Binance has recently been accused of being a Chinese company.

The Committee on Foreign Investment in the United States (CFIUS) can block deals which they view as national security risks. Also, US President Joe Biden recently signed an executive order “designed to sharpen the federal government’s powers to block Chinese investment in technology in the United States and limit its access to private data on citizens,” reported the New York Times.   

In the Voyager auction, Binance was asked to add more money on top of its bid, as insurance if a CFIUS review did take place.

Patrick Hillmann, chief communications officer of Binance, said: “Binance has made investments into countless American companies both directly and through Binance Labs. Binance has never been the subject of an inquiry officially or unofficially by CFIUS. Binance is an international company owned wholly by a Canadian citizen.”

DOGE/USD

0.12 Price
-1.700% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BTC/USD

64,675.50 Price
-0.210% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

BCH/USD

380.00 Price
-2.030% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

XRP/USD

0.63 Price
+5.960% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

Binance is not a Chinese company, CEO Changpeng Zhao insists

On 1 September, Binance CEO Changpeng Zhao wanted to make it clear that the crypto exchange is not a Chinese company.

The Binance CEO said: “Binance was never incorporated in China. We don’t have any legal entities in China, and we do not have plans to.”

Additionally, the company does not operate like a “Chinese company culturally,” Zhao said, adding: “I believe it’s critical today that we come forward with these facts.”

It would be impossible for Binance to be a Chinese company at present, he said, as Binance and all other crypto exchanges “have been designated a criminal entity in China”.

Zhao added: “The inference is that because we have ethnically Chinese employees, and perhaps because I am ethnically Chinese, we are secretly in the pocket of the Chinese government. We are an easy target for special interests, media, and even policymakers that hate our industry. This is obviously not true.”

Zhao and his entire family left China two months after the 1989 Tiananmen Square protests, when he was 12 years old. Although it usually takes seven years to obtain a passport and a Canadian visa, the Canadian embassy was fast-tracking visas at that time.

Zhao then grew up in Vancouver and went to McGill University in Montreal. He said: “I am a Canadian citizen, period.”

Voyager did ask for a bankruptcy judge’s permission to honour withdrawal requests for $350m (£308m) in cash funds on behalf of its customers.

Capital.com has reached out to both Binance and FTX for a comment on this matter, but did not immediately receive a reply.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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