Voyager Binance auction: Will US national security concerns stop CZ bidding for stricken crypto lender’s assets
07:35, 15 November 2022
Clients of the defunct cryptocurrency lender Voyager Digital breathed a sigh of relief in September when the crypto exchange FTX struck a deal to buy its assets, promising creditors could recover 72% of their lost funds.
But since FTX filed for bankruptcy on 11 November, the deal is off the table and in a statement Voyager said it is looking for another buyer.
Will the FTX’s former rival Binance step in? Or could national security concerns, which tainted the world’s largest cryptocurrency platform’s bid last time around, hinder the company’s efforts to acquire Voyager again?
FTX to US Dollar (FTT)
National security concerns
In the light of recent revelations that showed FTX’s rather lean accounts, questions were raised about the defunct company’s intention to bail out former Voyager clients, who would have been onboarded onto FTX’s platform as part of the deal.
Following FTX filing for Chapter 11 bankruptcy, the asset purchase agreement between Voyager and FTX.US is no longer binding, said Voyager in its statement adding it is “active discussions with alternative bidders”.
FTX’s former competitor Binance was one of the bidders in the original Voyager Digital auction, but it was met with concerns over national security checks in the process.
The digital asset bourse was asked to pay extra money on top of its bid, in case its offer were to be reviewed by the Committee on Foreign Investment in the United States (CFIUS). CFIUS is an interagency committee authorised to examine certain transactions that involve foreign investment in the US and determine whether it poses a potential security threat to the nation.
Binance is registered in the Cayman Islands and has offices in Bahrain, Dubai, and Paris. Its founder and CEO, Changpeng ‘CZ’ Zhao, who by his own admission is a Camadian, grew up in Canada after fleeing China, where he was born.
‘Shocking xenophobia’
Binance spokesperson Patrick Hillmann, the company’s chief communications officer, objected to being questioned about CFIUS requirements He said:
“Binance is a Canadian company owned wholly by a Canadian citizen. The xenophobia underlying the very nature of us receiving [a question about CFIUS concerns] is almost as shocking as the violation of confidentiality.”
Binance has not yet said whether it plans to make a bid for Voyager’s assets in the reopened auction.
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