By Dietrich Knauth
(Reuters) – Bankrupt crypto lender Voyager Digital is working to expedite a U.S. national security review that could delay or block its proposed $1 billion sale of its assets to Binance.US, its attorneys said on Tuesday.
Voyager attorney Joshua Sussberg said during a court hearing that Voyager is responding to questions submitted over the holidays by he U.S. Committee on Foreign Investment in the United States (CFIUS), an interagency body that vets foreign investments into U.S. companies for national security risks. He said Voyager intends to address any risk that CFIUS would oppose the transaction.
“We are coordinating with Binance and their attorneys to not only deal with that inquiry, but to voluntarily submit an application to move this process along,” Sussberg said.
CFIUS said in a Dec. 30 court filing that its review “could affect the ability of the parties to complete the transactions, the timing of completion, or relevant terms.”
The Binance transaction includes a $20 million cash payment and an agreement to transfer Voyager’s customers to Binance.US’s crypto exchange, Sussberg said. Customers would then be able to make withdrawals for the first time since July.
If CFIUS blocks the transaction, Voyager will be forced to repay customers with the crypto it has on hand, resulting in a lower payout for Voyager users, Sussberg said.
Washington has increasingly used CFIUS to stymie Chinese investment in the United States.
Binance is owned by Changpeng Zhao, a Chinese-born Canadian citizen, and has no permanent headquarters. The company has been the subject of a money laundering probe by U.S. prosecutors. Binance.US, based in Palo Alto, California, has said that its separate American exchange is “fully independent” of the main Binance platform.
Voyager filed for bankruptcy in July, months after the crash of major crypto tokens TerraUSD and Luna sent shockwaves across the digital asset industry.
Voyager initially planned to sell its assets to FTX Trading, but that deal imploded when FTX went bankrupt in November amid a frenzy of customer withdrawals and fraud allegations that led to the arrest of founder Sam Bankman-Fried.
(Reporting by Dietrich Knauth; Editing by David Gregorio)
