First stop in crypto industry recovery: Voyager
Binance CEO Changpeng Zhao is aiming for a $1 billion fund for the possible purchase of troubled assets in the digital-asset sector.
“If that’s not enough we can allocate more,” Zhao said in an interview with Bloomberg Television.
This comes on the heels of reports saying Zhao and several deputies met with investors last week in Abu Dhabi to solicit funds for a crypto industry rehabilitation fund. Parties he met include entities affiliated with UAE National Security Adviser Sheikh Tahnoon Bin Zayed, who oversees a large financial empire.
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“CZ’s meetings in Abu Dhabi were all focused on general global regulatory matters — specifically how Middle Eastern regulators could lead the globe by exploring more aggressive proof of custody requirements for crypto exchanges,” a Binance spokesperson said.
Last week, Zhao announced the crypto exchange’s intentions to form a fund to assist ventures experiencing a liquidity issue as the bankruptcy of rival FTX ripples across the sector. Tentatively called the “industry recovery fund,” the initiative aims to “help projects who are otherwise strong, but in a liquidity crisis.”
The Binance chief also recently confirmed that the exchange’s US arm will make a new bid for bankrupt crypto lender Voyager Digital as part of the said initiative, relatively possible now that FTX’s bankruptcy is final and rendering it unable to complete the planned acquisition.
“Binance.US will make another bid for Voyager now, given FTX is no longer able to follow through on that commitment,” he said in an interview with Bloomberg.
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The bidding process for the assets of Voyager has restarted, with active discussions said to currently be underway with alternative bidders. The company is said to be focused on “maximizing the value returned to customers and other creditors.”
Under the previous agreement with FTX, Voyager was to sell all of its crypto assets as well as its operating assets to a subsidiary of FTX, West Realm Shires Inc. The total price to be paid was $1.4 billion, of which $1.311 billion was related to the purchase of crypto at fair market value, and a further $111 million to be paid on top, presumably for the operating assets of the company.
Following Voyager’s bankruptcy, FTX emerged as the front-runner to purchase the lender, with Binance’s proposal reportedly being stymied by worries that it would pose a national security risk to the US government.
“I think the U.S. national security concerns were rumors spread by FTX to try and push us out of the bid,” Zhao said. “There was never any concerns about us participating in the bid.”
Acquiring Voyager, a US-based crypto firm, might run a potential regulatory risk for Binance if the funding will be disclosed to have stemmed from other foreign investors like UAE–most likely with the law governing the Committee on Foreign Investment in the United States.
Binance has also been dogged by suspicions that it is a Chinese corporation, despite the fact that Zhao was born in Canada and the firm reportedly registered in Cayman Islands. “I am a Canadian citizen, period,” he stated in a September blog post.
Information for this briefing was found via Bloomberg, Coindesk, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
