Binance US Takes a Bet on Voyager Digital 🎲

Binance US Takes a Bet on Voyager Digital

Binance US, a “de facto subsidiary” of international cryptocurrency exchange Binance, is set to acquire the crypto assets and customer deposits of Voyager Digital for $1.02bn, after Voyager filed for bankruptcy protection in July 2022. The deal follows the collapse of a planned acquisition by FTX, which went bankrupt after a multi-billion-dollar balance sheet hole was exposed. Voyager had around $1.3bn in assets at the time of filing but was owed more than $650m by crypto Hedge Fund Three Arrows Capital. Voyager said Binance.US offered “the highest and best bid” after a review of strategic options.

The acquisition of Voyager Digital’s crypto assets and customer deposits by Binance US is expected to be completed in the coming weeks. More than 1.7 million Voyager users will be affected by the deal, which aims to “maximize the value returned to customers and other creditors on an expedited timeframe,” according to a press release from Voyager. How the acquisition may impact Binance’s stake in the FTX-Alameda bankruptcy is still being determined. In the broader sense, this shows a consolidation of power for the centralized crypto exchange Binance. A centralized cryptocurrency exchange is a platform that allows users to buy and sell cryptocurrencies in which a single entity or organization controls this process. On the other hand, a decentralized cryptocurrency exchange (DEX) is a platform that allows users to buy and sell cryptocurrencies in a decentralized manner, without the need for a central authority or intermediary, by using smart contracts to facilitate trades between users. Because they do not rely on a central authority, DEXs are considered more secure and less vulnerable to cyber-attacks than centralized exchanges.

What do you think about the acquisition? And how could it affect the power balance between centralized and decentralized exchanges?

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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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