Voyager Digital used to be a fast-growing cryptocurrency platform in the United States founded in 2018 to bring choice, transparency, and cost efficiency to the marketplace. While it used to be one of the leading companies, it now struggles to survive, and Binance plans to acquire the company. A lot has been going on; if you haven’t caught up on everything, we will update you in this article on what is happening. 

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Company Overview

Via its companies, Voyager Digital Ltd. primarily serves the US and Canada as a broker of digital assets. With the help of its digital platform, customers may open one account and transact in crypto assets on a number of controlled markets. Interesting thing to know,  the Dallas Mavericks had previously announced with pride a five-year agreement with the cryptocurrency trading platform Voyager Digital. Owner Mark Cuban continued the long-standing advertising practice of highlighting the fact that he was not just Voyager's new sponsor but also a customer who conducted his own bitcoin trading on the site. Now, Mark Cuban Mark Cuban is facing a class-action lawsuit for his promotion of the company.

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What triggered the downfall? 

In July 2022, Voyager filed for Chapter 11 bankruptcy protection because it was unable to pay back client withdrawals due to a turbulent decline in the value of digital currencies. The failure of Three Arrows Capital, a purported hedge fund that borrowed money from other organizations like Voyager to make speculative bets on tokens like the defunct stablecoin terraUSD, contributed to the firm's dissolution. 3AC missed payments on $670 million in Voyager loans in June. By stating that FTX U.S. "would permit users to trade and store bitcoin after the end of the Company's chapter 11 proceedings," Voyager made a probable shift of its customers to the exchange known. On October 19, the asset acquisition agreement will be submitted for approval to the U.S. Bankruptcy Court for the Southern District of New York. According to the announcement, the transfer of Voyager's assets to FTX U.S. is subject to a vote by creditors and "other standard closing conditions."  Bankman-Fried has emerged as a hero for many businesses hurt by the falling value of digital tokens and the ensuing liquidity problems at their platforms during the 2022 crypto winter. The 30-year-old former quant trader who has become an “expert” in cryptocurrency has been looking at that time for deals amidst the recent devastation to the sector.

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At this point, what went wrong? 

In December, Bankman-Fried was detained in the Bahamas and charged with wire fraud, securities fraud, and money laundering, among other offenses. He was then extradited to the US and freed from custody on a $250 million bail, which Reuters claims to be the most significant pretrial bond ever. Although a date has yet to be established, the Southern District of New York is where the trial is anticipated to take place. Two former senior managers of Bankman-corporations, Fried's Caroline Ellison and Gary Wang, have admitted guilt to a number of fraud-related counts and are helping federal investigators. Moreover, the Securities and Exchange Commission accused Bankman-Fried, Ellison, and Wang of scamming FTX investors. The collapse of FTX is not a typical example of the volatility of cryptocurrencies or investor risk-taking; rather, it was caused by layers of deceit that now seem to be too thick to be sustained. In the last year, FTX completed a number of high-profile acquisitions and bailed out other struggling crypto startups, giving the impression that it was booming. In actuality, it was insolvent. According to reports, at least $1 billion in client cash are gone.

Now What? 

Binance.US has agreed to buy Voyager’s assets for $1.3 billion and the U.S. Department of Justice has appealed a court order approving Voyager Digital's bankruptcy plan, creating a new hurdle for the crypto lender's plan to sell its assets and transfer its customers to Binance.

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A federal judge on Monday temporarily stopped bankrupt Voyager Digital from completing a proposed $1.3 billion sale to crypto exchange Binance.US, allowing the U.S. government more time to pursue appeals that challenge the legality of the deal. They argued that the protections could rubber stamp crypto tokens that might be unregistered securities, as well as transactions that could be illegal under U.S. securities laws.

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Legal filings submitted late Monday night state that if the U.S. government's legal issues are not settled by April 13 Voyager and its creditors risk losing $100 million.

“Consummation of the plan by April 13 is necessary to preserve massive creditor value,” said a filing by Voyager’s creditors. “The evidence is uncontroverted that, if the deal is not completed, Voyager’s creditors will lose roughly $100 million in value.”

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The sale will be suspended while the dispute is resolved after the U.S. government's legal team objected that the contract's specific clauses essentially shield the corporation from prosecution for violating securities or tax laws. Last week, District Judge Jennifer Rearden agreed. The Securities and Exchange Commission tried to claim that the transfer's assets, such as the Voyager token VGX, may be unregistered securities in March, but Wiles rejected their claim.

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In conclusion, the situation is still highly messy. U.S. government's legal team wants to make sure no shady assets will be transferred, but it penalizes all the other holders. Furthermore, holders will recover some of their assets, but the worst part is if you have invested in the company’s stocks. YoY, investors are 99%+ down. 

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