Binance’s $1 billion (around Rs.8,275 billion) acquisition of bankrupt crypto lender Voyager Digital could be delayed or blocked by a US national security review, according to a bankruptcy court filing on Friday.
The crypto exchange’s US-based subsidiary, Binance.US, intends to buy Voyager’s crypto lending platform with an offer that includes $20 million (around Rs.1.65 billion) in cash and crypto assets used to repay Voyager’s customers.
But the US Committee on Foreign Investments in the United States (CFIUS), an interagency body that reviews foreign investments in US companies for national security risks, said on Friday that its review “could affect the parties’ ability to complete the transactions, the time of completion or relevant conditions.”
Attorneys for Voyager and Binance.US did not immediately respond to requests for comment on Friday.
CFIUS is increasingly being used by Washington as a tool to discourage Chinese investment in the United States.
binance is owned by Chinese-born, Singapore-based Changpeng Zhao and has no permanent headquarters. The company was the subject of a money laundering investigation by US prosecutors. Based in Palo Alto, California, Binance.US has said its separate American exchange is “completely independent” from the main platform, Binance.
CFIUS did not mention specific security concerns raised by the Voyager acquisition in its court filings, but it said bankruptcy courts have sometimes ruled that national security concerns can prevent a company from bidding on assets in bankruptcy.
Voyager filed for bankruptcy in July, months after Major crashed crypto Tokens TerraUSD and Luna sent shockwaves through the digital asset industry.
Voyager originally planned to sell its assets to FTX Trading, but that deal imploded FTX went bankrupt in November amid a spate of customer withdrawals and allegations of fraud that led to the arrest of founder Sam Bankman-Fried.
© Thomson Reuters 2022
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