Binance Looking to Make Cross-Market Bids for Distressed Firms

UTC by Benjamin Godfrey · 3 min read
Binance Looking to Make Cross-Market Bids for Distressed Firms
Photo: Web Summit / Flickr

Binance is also looking at acquiring the Genesis Trading loan book, which may come off as a major relief to the company’s parent firm, Digital Currency Group (DCG).

Binance cryptocurrency trading platform, the largest exchange in the blockchain ecosystem is reportedly looking at making bids to acquire the liabilities of some of the distressed firms in the industry. With the implosion of FTX, some of the companies most affected by the bankruptcy have been left with no option but to seek a bailout from other investors.

Binance joined the bids for Voyager Digital earlier but was beaten by FTX who was seen as the “White Knight” back then. With FTX out of the picture, sources close to the transactions said Binance is now ready to relaunch its bid for Voyager Digital. With Voyager Digital now back in the bidding process, it is reported that Wave Financial and CrossTower are also running to acquire the company’s assets.

The bidding reopened by Voyager Digital is notably going to be a complicated one for prospective investors to get involved with. The company may likely file a claim against FTX US for breach of contract.

“The problem is that the claim is only going to be against FTX US,” said Thomas Braziel, managing partner at investment firm 507 Capital. “I worry a lot of the collateral is going to be held in trust. So any cause of action they have could end up being behind all the customers. And the problem is that if customers aren’t going to be made whole, then what’s your unsecured claim going to be worth? It’s going to be worth bupkis.”

While these complications are possibly being considered by Binance and other investors, Binance chief communications officer Patrick Hillmann said in a statement that the trading platform’s focus is to help the industry get back on its feet as best as possible.

“Binance is not looking to be the ‘white knight’ of crypto,” he said, “There are no Luke Skywalkers or Darth Vaders in business. This is a company, with the most to lose as its market leader, looking around to see where we can help bolster the industry through a black swan event.”

Binance and Genesis Trading

As reported by Blockworks, Binance is also looking at acquiring the Genesis Trading loan book, which may come off as a major relief to the company’s parent firm Digital Currency Group (DCG).

For a loan book that is pegged at $2.8 billion as of the end of the third quarter, any acquisition move from Binance will further exert the trading platform’s presence in the industry, displacing DCG from the epicenter of the blockchain ecosystem.

Many industry stakeholders believe Binance played a key role in the collapse of its strongest rival after CEO Changpeng ‘CZ’ Zhao said he would sell off as much as $500 million worth of FTX Token (FTT). The declaration fueled a bank run on FTX deposits and precipitated the bankruptcy filing a few days later.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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