Binance.US

Binance’s market share drops on CFTC suit and no-fee trading halt: Report

Binance’s market dominance fell largely due to its decision to end zero-fee trading for some trading pairs and not the Commodity Futures Trading Commission’s lawsuit, says blockchain analytics platform Kaiko.

The dominance of cryptocurrency exchange Binance in trading volume market share has slipped over the past two weeks following a lawsuit from the United States commodities regulator and its decision to halt some zero-fee trading.

In an April 4 newsletter, blockchain analytics platform Kaiko reported that Binance “lost 16% market share of trade volume,” with its market share at 54% as of the end of Q1.

The U.S. Commodity Futures Trading Commission sued Binance on March 27, alleging it flouted regulatory compliance and violated derivatives laws by offering trading to U.S. customers without registering with market regulators.

Kaiko said Binance still takes in more volume than the rest of its combined competitors, but its March 15 decision to end zero-fee spot and margin trading for 13 trading pairs, including BNB (BNB), Bitcoin (BTC) and Ether (ETH) with multiple fiat currencies and stablecoins, led to a loss in trading volume.

“Overall, Binance’s excess volume largely vanished with the end of zero-fee trading, which was reflected in an even dispersal in market share among the remaining exchanges,” Kaiko reported.

Binance’s market share trading volume among the top centralized exchanges fell to 54% by the end of the first quarter. Source: Kaiko

Kaiko explained part of this fall was alleviated by its U.S. arm, Binance.US, which managed to triple its market share over the quarter from 8% to 24%.

Binance didn’t fall excessively in every domain, though. The exchange managed to largely maintain its derivatives dominance, only giving up 2% market share over the last quarter.

Kaiko explained that the fall in trading volume figures was influenced mostly by the end of zero-fee spot trading as opposed to the CFTC lawsuit:

“The trend is quite different when looking at derivatives volumes: Binance only lost about 2% of market share for perpetual futures trade volume. This suggests that the majority of market share was lost purely due to the end of zero-fee spot trading, rather than trepidations around a lawsuit.”

The market share fall to 54% comes after Binance was one of the “big winners” of the FTX fiasco, which saw its market share in trading volume rise to 65% during the last quarter of 2022:

“Binance’s market share increased from 50% to 65% after November 2022, while OKX saw its market share increase from under 10% to 17%. Bybit and the three smaller exchanges Huobi, Bitmex and Deribit, on the other hand, saw their market share decline.”

Over the last quarter, Upbit was the only crypto exchange that reclaimed a “significant share” in trading volume of the 17 trading platforms that Kaiko analyzed.

Related: DEXs growing faster than CEXs but Binance still sees 171M visitors in a month

In light of recent regulatory pressures, the banking crises and the catastrophic collapse of FTX, many reports have observed a growing trend towards decentralized alternatives and self-custody wallets.

Bitcoin and Ether left centralized exchanges in record numbers following the fall of FTX. The daily trading volume of decentralized perpetual exchanges also reached $5 billion in November 2022, the most since Terra Luna Classic (LUNC) and its connected TerraClassicUSD (USTC) stablecoin collapsed in May 2022.

Trading volumes on the decentralized exchange Uniswap are now rivaling that of crypto exchanges Coinbase and OKX but are still only a fraction of that processed by Binance.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

US officials appeal protections for Voyager execs in Binance.US sale

The DOJ disagrees with the legal protections given to those involved in the Voyager sale to Binance.US, saying the court “improperly” exceeded its authority.

United States officials want to remove a provision included in bankrupt lender Voyager Digital’s plan to sell its digital assets to crypto exchange Binance.US that would prevent them from legally pursuing anyone involved with the sale. 

In a motion filed on March 14 in a New York bankruptcy court, U.S. trustee William Harrington and other government attorneys argued “the court improperly exceeded its statutory authority” in approving the pardoning.

They requested the court’s approval of the sale be delayed for two weeks to allow them to file an appeal.

The provision protects those involved in carrying out the sale from being held personally liable for its implementation, which the court approved on March 7 after it was found that 97% of Voyager customers favored the plan, according to a Feb. 28 filing.

While U.S. officials are not objecting to other parts of the proposed sale, they argue the provision would impede the government’s “ability to enforce its police and regulatory powers.”

On March 6, the U.S. Securities and Exchange Commission also objected to the plan, particularly the “extraordinary” and “highly improper” exculpation provision, arguing the repayment token would constitute an unregistered security offering, and that Binance.US is operating an unregulated securities exchange.

Related: Binance.US, Alameda, Voyager Digital and the SEC — the ongoing court saga

A hearing on the issue is set to occur on March 15 at 2:00 pm Eastern Time.

Based on the latest estimates, the plan is expected to result in Voyager creditors recovering approximately 73% of the value of their funds.

SEC snubbed as Voyager wins court approval for sale to Binance.US

The ruling allows the crypto lender a path out of its bankruptcy, but it still has to undertake some due diligence with Binance US before the sale is final.

Bankrupt cryptocurrency lender Voyager Digital has won court approval to sell over $1 billion of its assets to Binance.US.

The approval was granted by United States Bankruptcy Judge Michael Wiles on Mar. 7, which came after four days of arguments presented by Voyager and the United States Securities Exchange Commission.

Wiles said he would give the trading platform permission to close the Binance.US sale and issue repayment tokens to impacted Voyager customers, which would give them back approximately 73% of what they’re owed.

Wiles rejected a series of arguments by the SEC that the redistribution of the funds from Voyager to Binance.US would violate U.S. securities laws, according to a Mar. 7 report from Bloomberg:

“I cannot put the entire case into indeterminate deep freeze while regulators figure out whether they believe there are problems with the transaction and plan.”

Peter M. Aronoff, a lawyer with the Department of Justice, said at the hearing it’s considering appealing Wiles’ decision.

The judge’s decision comes just over a week after 97% of 61,300 Voyager account holders were found to favor the current Binance.US restructuring plan, according to a Feb. 28 filing.

The approval comes a day after Judge Wiles stated that no U.S. agency, including the SEC, would be allowed to punish Voyager executives in relation to the issuance of a potential bankruptcy token.

The trading platform will now take a few weeks to decide whether to complete the Binance.US sale or liquidate on its own and turn over the proceeds to Voyager account holders.

This will depend on how troubling Voyager views the ongoing investigations that Binance.US is entangled in with federal authorities.

Related: SEC objection to Voyager-Binance.US deal questioned by US judge

Voyager’s lead investment banker, Brian Tichenor, said in a March 3 court hearing if the approved restructuring plan is executed, customers would receive about $100 million more than if Voyager liquidated on its own

Customer payouts will also be influenced by Voyager’s bankruptcy court dispute with FTX’s sister company Alameda Research, which is demanding that Voyager hands over what was originally lent out. Voyager has agreed to reserve $445 million in case it loses that dispute.

The price of Voyager’s token, VGX, shot up 32.9% from $0.37 to $0.50 in the four hours of the news before cooling off to $0.46 at the time of writing, according to CoinGecko data.

Price change of Voyager’s token, VGX over the last 24 hours. Source: CoinGecko.

SEC not allowed to punish Voyager advisers over bankruptcy token, says US judge

The SEC claims the transactions involved with redistributing the funds to impacted Voyager account holders will trigger U.S. securities laws.

The United States Securities Exchange Commission (SEC) won’t be allowed to fine executives involved in Voyager Digital should it end up issuing bankruptcy tokens to help repay impacted customers, bankruptcy judge Michael Wiles has said.

The comments from Wiles came on Mar. 6, the third day of hearings regarding a plan by Voyager to issue a repayment token and sell $1 billion of assets to Binance.US.

The SEC earlier argued that the repayment token would constitute an unregistered security offering, while Binance.US is operating an unregulated securities exchange.

In a supplemental objection statement, it also objected to a legal protection which stated that no U.S. agency, including the SEC, will be able to bring “any claim against any Person on account of or relating to the Restructuring Transactions.”

Essentially, this means that executives and restructuring advisers involved in Voyager’s bankruptcy would be shielded from lawsuits if they implement the bankruptcy plan, as long as it is court-approved.

The SEC’s Mar. 6 supplemental objection statement to Voyager’s Chapter 11 Restructuring Plan. Source: Stretto.

While the SEC described these provisions as “extraordinary” and “highly improper,” Wiles explained that giving the SEC such authority would “leave a sword hanging over the heads of anybody who’s going to do this transaction,” according to a Mar. 6 Bloomberg report, stating:

“How can a bankruptcy case or any court proceeding function with that kind of suggestion?”

SEC lawyer Therese Scheuer argued however that the legal protections are so broad that Voyager employees and lawyers would have permission to violate securities laws. After debate, Voyagers lawyers agreed to narrow the scope of legal releases, according to Bloomberg.

Related: Voyager victim calls for trustee to seize control of the estate

The trading platform officially filed for bankruptcy on Jul. 5 in an attempt to restructure the firm and “return value” back to over 100,000 customers.

The court has been considering a restructuring plan to bring Voyager out of Chapter 11 bankruptcy which would first announced on Dec. 19.

The plan would see crypto exchange Binance.US acquire its assets for $1.02 billion — an option Voyager said at the time represented the “highest and best bid for its assets.”

The SEC objected to the sale on Feb. 22, claiming aspects of the restructuring plan could breach securities laws. The regulator was then criticized over its ambiguous reasoning for the objection in a Mar. 2 court hearing.

A Feb. 28 court filing found that 97% of 61,300 polling Voyager account holders were in favor of the current Binance.US restructuring plan.

Account holder claims voting results: Source: Stretto.

SEC objection to Voyager-Binance.US deal questioned by US judge

A United States judge scolded the Securities and Exchange Commission over its vague objection to Voyager’s restructuring deal and asked for specifics on its concerns.

The bankruptcy judge on Voyager Digital’s case has reportedly scolded the United States securities regulator over its ambiguous reasoning for objecting to the crypto lending firm’s proposed sale to Binance.US.

At a March 2 hearing in a New York court, U.S. bankruptcy judge Michael Wiles said the Securities and Exchange Commission had basically asked to “stop everybody in their tracks” without explaining how to address concerns it had over the deal, according to a Reuters report.

The court was considering a restructuring plan announced on Dec. 19 to bring Voyager out of Chapter 11 bankruptcy that would see crypto exchange Binance.US acquire its assets for $1.02 billion — an option Voyager said at the time represented the “highest and best bid for its assets.”

The SEC, however, filed an objection to the sale on Feb. 22, claiming aspects of the restructuring plan could breach securities laws, namely the crypto transactions that will need to happen to rebalance funds to redistribute to Voyager account holders.

In court, SEC attorney William Uptegrove offered a reserved answer to Judge Wiles when asked if the regulator believes the plan violated the law, saying:

“We can’t take a position at this point. The SEC is a deliberative body, and its process is a nonpublic one by federal law.”

Wiles hit back, saying “deliberative is one thing, but what have you done?” and added, “if there are reasons to be concerned here, I need to hear specifics.”

The sale requires court approval, along with the go-ahead from the SEC and the Committee on Foreign Investment in the United States (CFIUS), which is probing the deal to review if it will entail a foreign investment and raise national security concerns.

Judge Wiles is set to hear continued arguments on the bankruptcy plan on March 3.

Related: FTC announces investigation into Voyager’s ‘deceptive and unfair marketing’ of crypto

The proposed Binance.US plan would transfer Voyager customers to the crypto exchange. Those customers would then be able to withdraw their funds for the first time since the platform filed for bankruptcy last July.

Customers would reportedly recover over 70% of their deposited value as of the time of the bankruptcy. In a poll of 61,300 account holders with claims against the crypto lender, the plan was favored by 97% of Voyager’s customers.

Binance.US restructuring plan favored by 97% of Voyager customers

An overwhelming majority of Voyager account holders want Binance.US to buy out the firm’s assets.

A move by Binance.US to acquire assets belonging to the bankrupt crypto lending firm Voyager Digital has been favored by 97% of Voyager’s customers.

A Feb. 28 court filing shows an overwhelming majority of Voyager Digital account holders are in favor of the buyout from the United States-based arm of the crypto exchange Binance.

Bankruptcy management firm Stretto conducted the balloting of Voyager customers, polling 61,300 account holders with claims against the embattled crypto lender.

Of that total, 59,183 voted in favor of the Binance.US restructuring plan, with just 3%, or 2,117 voters, rejecting it.

Account holder claims voting results: Source: Stretto

The voters were divided into four classes, including account holder claims and three categories of those with “general unsecured claims.” The latter groups also voted in favor of the proposal.

In December, Binance.US disclosed an agreement to buy Voyager’s assets for $1.02 billion. According to the press release at the time, the Binance.US bid “aims to return crypto to customers in kind, in accordance with court-approved disbursements and platform capabilities.”

However, there has been a lot of pushback and numerous objections to the proposal by the American division of the world’s largest crypto exchange.

The Texas State Securities Board and the state’s Department of Banking objected, claiming the restructuring plan contains “inadequate” disclosures. Some of these included not informing unsecured creditors that they may only get 24% to 26% recovery rather than the 51% they would receive under Chapter 7 bankruptcy.

Related: Voyager is selling crypto assets through Coinbase, suggests on-chain data

The U.S. Securities and Exchange Commission also objected to the move in a Feb. 22 court filing, claiming that the Binance.US acquisition of Voyager assets could breach securities law.

On that same day, the Federal Trade Commission started an investigation into Voyager Digital for its “deceptive and unfair marketing of cryptocurrency to the public.”

SEC files objection to Binance.US bid for Voyager assets

The SEC has moved to bar final approval of Binance.US’ $1 billion bid for assets belonging to bankrupt crypto lending firm Voyager Digital.

The United States Securities and Exchange Commission (SEC) has objected to Binance.US’ move to acquire over $1 billion of assets belonging to the defunct cryptocurrency lending firm Voyager Digital.

According to a Feb. 22 filing submitted to the U.S. Bankruptcy Court for the Southern District of New York, the SEC believes that some aspects of the asset restructuring plan of Binance.US’ acquisition could breach securities law.

The SEC is formally investigating whether Binance.US and related debtors violated anti-fraud, registration and other provisions of the federal securities laws. The SEC noted particular concern around the security of assets through the planned acquisition.

The SEC argues information provided in the planned purchase of Voyager assets fails to adequately outline whether Binance.US or affiliated third parties will have access to customer wallet keys or control over anyone with access to such wallets.

Related: CZ denies report Binance is considering major breakup with US business partners

Furthermore, the filing notes insufficient provision of safeguards to ensure that customer assets are not transferred off the Binance.US platform. The SEC also argues that Binance.US has not declared internal controls and practices ensuring the safety of customer assets.

The SEC is calling for Binance.US to address these issues by providing information regarding who has access to customer assets and the necessary controls after the deal is finalized.

The SEC is mainly focused on part of Binance.US’ initial plan and disclosure statement for its Voyager bid. The company will retain the right to sell cryptocurrencies belonging to Voyager to distribute to account holders, which is the main point of concern for the U.S. regulator.

“However, the Debtors (Binance.US) have yet to demonstrate that they would be able to conduct such sales in compliance with the federal securities laws.”

According to the filing, various cryptocurrency transactions will need to take place to rebalance funds for redistribution to account holders, which the SEC believes may violate sections of the Securities Act.

The regulator argues that the disclosure statement provided by Binance.US and other debtors does not address the possibility of these transactions being unlawful. It’s believed that this possibility could impact the estimated 51% recovery of funds paid out to Voyager account holders and claimants.

A footnote of the filing highlights the potential of Voyager buying and selling certain digital assets to rebalance asset holdings. The SEC flags the potential sale of Voyager Token (VGX), issued by Voyager, which “may constitute the unregistered offer or sale of securities under federal law.“

The SEC also notes that Binance.US could be acting as an exchange under existing Exchange Act laws, which it is prohibited to do without the necessary registration as a national securities exchange or exemption from doing so.

The filing highlights concerns over the lawfulness and overall ability to carry out planned asset restructuring through the acquisition and questions whether Voyager debtors will be able to recoup some of their assets following the bankruptcy of the firm:

“Creditors and stakeholders are entitled to know whether this transaction provides them a meaningful economic benefit, or whether this is just a $20 million sale of Voyager’s customer list to Binance.US.”

As Cointelegraph reported, Binance is looking to remedy previous regulatory and law-enforcement investigations in the U.S. The firm is facing the possibility of fines relating to previous compliance issues.

Binance is also dealing with regulatory action toward Paxos, which is responsible for issuing Binance’s U.S. dollar backed Binance USD (BUSD) stablecoin. The New York Department of Financial Services ordered the firm to stop minting BUSD tokens from Feb. 21. Paxos has countered claims from the SEC that BUSD is a security after receiving a Wells notice from the regulator for failing to register the token as a security in the U.S.

Voyager and Binance.​US deal given initial nod amid national security probe

The deal has received initial approval from the bankruptcy judge but will require the approval of creditors and final court approval.

Bankrupt crypto lender Voyager Digital has received initial court approval for its proposal to sell its assets to Binance.US for $1.02 billion.

The approval comes amid a national security probe concerning Binance.US that Voyager is seeking to speed up.

On Jan. 10, Judge Michael Wiles of the United States Bankruptcy Court for the Southern District of New York allowed Voyager to enter into the asset purchase agreement and seek creditor approval, but the sale will not become final until a future court hearing, according to a Jan. 11 Reuters report.

It comes as Voyager wants to expedite a review of its proposal to sell assets to Binance.US, which could result in the deal being blocked or delayed.

Voyager’ attorney Joshua Sussberg noted during the court hearing that Voyager has been responding to questions from the Committee on Foreign Investment in the United States (CFIUS) and will address any concerns that CFIUS has which could see it 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 is an inter-agency body that reviews foreign investments or acquisitions of U.S. companies for national security concerns.

If it determines that national security concerns regarding the deal are justified CFIUS can block or unwind the transaction or tell involved parties to alter the deal to mitigate concerns.

Cast your vote now!

CFIUS filed a court notice on Dec. 30 indicating “one or more transactions contemplated” by Voyager could be subject to a review, resulting in possible blocks or delays.

Binance’s global entity is reportedly being probed by the U.S. attorney’s office over money laundering allegations, but its CEO, Changpeng “CZ” Zhao, has stated that Binance.US is a “fully independent entity” headquartered in California.

Zhao is a Chinese-born Canadian citizen and CFIUS is authorized to review any transactions that could result in foreign control of a U.S. business or thaaffords a foreign person an equity interest.

Related: Mark Cuban to face questioning under oath over promotion of Voyager

The Voyager Official Committee of Unsecured Creditors — a body representing creditors with no security interests in Voyager — supported the transaction in its current form, noting the deal would result in greater recoveries for creditors than if Voyager liquidated its holdings itself — which is what would occur if CFIUS blocks the transaction.

Previously, objections to the acquisition proposal from Alameda Research, the Securities and Exchange Commission, four U.S. states and the U.S. trustee were rebutted by the bankrupt lender on Jan. 8.

Voyager claimed that the transaction is in the best interest of its creditors and the objections “fail to put forward any factual or legal support” for its arguments.

Voyager announced on Dec. 19 that it had agreed to Binance.US’s bid to acquire its assets for $1.022 billion, after a $1.4 billion deal with FTX.US fell through following the bankruptcy of the crypto exchange.

SEC files objection to Binance.US’s plans to acquire Voyager Digital

The SEC wants to see more information included in the $1.022 billion deal between Binance’s U.S. arm and Voyager Digital before it agrees to the acquisition.

The United States Securities and Exchange Commission (SEC) has filed a “limited objection” to crypto exchange Binance.US’s proposed $1 billion takeover of bankrupt crypto lender Voyager Digital, citing a lack of “necessary information.”

The limited objection was filed on Jan. 4, with the SEC pointing to a lack of detail regarding Binance.US’s ability to fund the acquisition, what Binance.US’s operations would look like following the deal, and how customer assets will be secured during and after the transaction.

A limited objection is similar to a normal objection but only applies to a specific part of the proceedings.

Additionally, the regulator also wants Voyager to provide more detail on what would happen should the transaction not be consummated by April 18.

In its filing, the SEC said it already communicated its concerns with Voyager and the lender intends to file a revised disclosure statement prior to a hearing on the matter.

Some commentators interpreted the objection as the SEC suggesting Binance.US would not be able to afford the acquisition without “some untoward dealing” such as receiving funds from Binance’s global entity.

While Binance CEO Changpeng Zhao (CZ) has publicly stated that Binance.US was a “fully independent entity,” an Oct. 17 Reuters report alleged that the U.S. entity acts more like a “de facto subsidiary” that was created to “insulate Binance from U.S. regulators.”

In response, CZ argued in an Oct. 17 blog post that Binance was committed to complying with regulators, that the author of the article was reporting in a biased manner and had used a presentation provided by an external consultant that was never implemented.

Related: ‘Binance is the crypto market:’ Arcane crowns the exchange 2022’s winner

Voyager announced on Dec. 19 that it had agreed to Binance.US’s bid to acquire its assets, in a deal worth $1.022 billion in total.

The lender noted in a press release that the bid was the “highest and best bid for its assets,” which would maximize the value returned to customers and creditors “on an expedited timeframe.”

Voyager announced on Sept. 27 that FTX.US had won the auction for its assets with an offer of $1.4 billion, which would have seen customers recover 72% of their frozen crypto, a deal that has since fallen through.

Binance.US set to acquire Voyager Digital assets for $1B

Previously, FTX US was the largest bidder for the firm’s assets, with an offer of $1.4 billion.

According to a new press release published on Dec. 19, cryptocurrency exchange Binance.US will acquire assets of bankrupt crypto lender Voyager Digital for $1.022 billion. After a review of strategic options, the firm said that Binance.US represented the “highest and best bid for its assets.”

The $1.022-billion bid consists of the fair market value of Voyager’s cryptocurrency portfolio at a to-be-determined date in the future, along with an additional consideration equal to $20 million of incremental value.

“The Company’s claims against Three Arrows Capital remain with the bankruptcy estate, and any future recovery on these and other non-released claims will be distributed to the estate’s creditors. The Binance.US bid aims to return crypto to customers in kind, in accordance with court-approved disbursements and platform capabilities.”

The deal is set to close by April 18, 2023. Binance has agreed to make a $10-million deposit in good faith and will reimburse Voyager for certain expenses up to a maximum of $15 million. A hearing will be held by the presiding bankruptcy court to approve the purchase agreement on Jan. 5, 2023. In addition, the sale is subject to a creditor’s vote and other customary closing conditions.

Voyager paused withdrawals in July and filed for bankruptcy amid liquidity issues arising from its exposure to a $650-million loan default from defunct hedge fund Three Arrows Capital. Cointelegraph previously reported in October that troubled cryptocurrency exchange FTX US secured a bid for Voyager’s assets for $1.4 billion. The previous deal enabled senior claims to be paid out in full and allowed unsecured creditors to recover approximately 72% of the value of their accounts. 

In a Twitter post on Dec. 20, Voyager’s committee of unsecured creditors said that it believes that the Binance.US bid “appears to be the best transaction at this time,” though said it was “still evaluating” given a limited timeframe to evaluate the decision — having only been made aware of Voyager’s intention to accept the bid on Dec. 8. 

Update Dec. 20, 2:23 am UTC: Added a statement from Voyager’s committee of unsecured creditors.