Binance is expected to acquire bankrupt cryptocurrency lender Voyager Digital for $1 billion. But it risks being delayed by a US national security review, according to a filing from the bankruptcy court on Friday. There is even a possibility that the purchase will be completely blocked.
Binance’s crypto purchase is under scrutiny
The new development has emerged in the agreement between Binance.US and bankrupt crypto lending platform, Voyager Digital. The deal became subject to scrutiny by the US Committee on Foreign Investment (CFIUS), according to court records. cryptocoin.comAs we reported, the US-based entity of the exchange, Binance.US, was planning to acquire Voyager’s crypto lending platform with an offer that includes $20 million in cash and crypto assets that will be used to repay Voyager’s customers.
But the U.S. Foreign Investment Committee (CFIUS), an inter-agency body that examines foreign investment in U.S. companies for national security risks, said Friday that the review “may affect the timing, the ability of the parties to complete transactions.” In the document, they pointed out that in such matters, bankruptcy courts must determine a bidder’s qualification. It is also noted that it takes into account CFIUS reviews, as well as other potential national security concerns.
Binance.US had outpaced other bidders such as rossTower, Wave Financial, and INX. Thus, he sought a deal with Voyager that would quickly restore his client’s access to locked funds. Under the terms of the deal, which is currently under review, users will eventually gain access to their crypto assets. It will then receive payments from Voyager via Binance.US. To get things done, Binance.US offered an initial $10 million deposit. He offered to pay Voyager a maximum of $15 million more for expenses.
Voyager exploded after the LUNA crisis
CFIUS is increasingly being used by Washington as a tool to thwart Chinese investment in the US. Binance is owned by Chinese-born and Singapore-based Changpeng Zhao. The company has been the subject of a money laundering investigation by US prosecutors. Binance.US, based in Palo Alto, California, said the separate American exchange is “completely independent” from the main Binance platform. CFIUS did not mention any specific security concerns raised by the Voyager takeover in the court filing.
But he said bankruptcy courts have sometimes ruled that national security concerns can prevent a company from bidding for assets in bankruptcy. Voyager went bankrupt in July, months after major cryptocurrencies TerraUSD and Luna sent shock waves across the crypto-asset industry. Voyager initially planned to sell its assets to FTX Trading. However, this deal ended due to issues with FTX. As it is known, founder Sam Bankman-Fried was arrested. FTX filed for bankruptcy in November.