On January 10th, Reuters reported that Voyager gained initial court clearance to sell its assets to Binance.US for $1 billion. The final decision will be determined by creditors’ vote during a future court proceeding. Customers can recover 51% of the cost of their deposits through the sale.
A U.S. bankruptcy judge in New York, Michael Wiles, has permitted Voyager to proceed with an agreement to sell assets to Binance.US. However, the sale will not be final until it is approved by the court at a later date. The report stated that the court “will seek to expedite a U.S. national security review of the deal.”
During the court hearing, Joshua Sussberg, an attorney for Voyager, stated that the company was addressing concerns brought to light by the U.S. Committee on Foreign Investment in the United States (CFIUS) that had been raised over the holidays.
Sussberg said:
We are coordinating with Binance and their attorneys to not only deal with that inquiry but to voluntarily submit an application to move this process along.
As per the attorney Joshua Sussberg, the Binance deal involves a $20 million cash payment and a provision for transferring Voyager’s clients to BinanceUS’s cryptocurrency exchange platform, enabling them to make withdrawals after a gap of July.
Binance.US Transaction To Result In “Greater Recoveries”
The Voyager Official Committee of Unsecured Creditors (UCC) announced in a Twitter statement that, following the court hearing and recent developments in the case, they would be answering customer inquiries directly through Twitter. Moreover, they will also be conducting an upcoming Twitter Spaces town hall meeting to address their concerns.
In addition, the Committee asserts that:
The Binance.US transaction will result in greater recoveries for creditors than a self-liquidation.
The UCC stated that their primary focus in any transaction is to ensure the security of the cryptocurrency for all creditors, taking precedence over economic considerations, from the time of the transaction’s completion until each creditor’s distribution can be withdrawn.
In the past two weeks, the UCC collaborated with BinanceUS to revise different elements of the transaction, and the exchange consented to make several crucial modifications.
The UCC has highlighted that the transfer of crypto assets from Voyager to BinanceUS will only happen when the creditors can withdraw them instantly, and this will occur on a weekly schedule.
This way, the UCC has ensured that there is no chance of a significant crypto transfer taking place on the closing date, which could potentially be at risk if Binance.US goes into insolvency.
The UCC has given its support for the transaction with BinanceUS after reaching an agreement on the weekly transfer of cryptocurrency to the exchange only when creditors have the ability to withdraw them instantly.
The Amended APA (Link Mentioned in the Tweet), which reflects these and other agreed-upon terms, has made the UCC comfortable with the transaction.
To address the risk of the transaction not closing, the UCC included a “toggle” provision in the plan that automatically allows Voyager to self-liquidate if the Binance.US transaction is unsuccessful.
Related Reading | Ripple Doubles Down On Crypto’s Real-World Utility