On-chain analytics firm Arkham Intelligence reported that bankrupt crypto exchange Voyager had liquidated $56 million worth of Ethereum (ETH), Voyager Token (VGT), Shiba Inu (SHIB), and Chainlink (LINK). The analytics also show that Voyager has sold crypto assets worth $358.5 million in the last six weeks. The assets were sold on Binance.US, Coinbase, and through direct over-the-counter trades with market maker Wintermute.
While Voyager’s USDC balance has increased to $460 million, its wallets still hold approximately $271.5 million worth of crypto assets poised for liquidation, as confirmed by LookonChain analytics portal. Since January, Voyager’s liquidations accelerated significantly, with over $138 million moved since the start of March, compared to a combined $221 million in January and February.
Regulatory Hurdles for Binance.US Acquisition of Voyager
The US Department of Justice (DOJ) has challenged a New York court order that allowed Binance.US to acquire the bankrupt Voyager Digital’s assets. The appeal came one day after Judge Michael Wiles ruled in favor of the Voyager-Binance deal against the Securities Exchange Commission’s (SEC) opposition.
Voyager filed for bankruptcy last summer alongside a host of other crypto firms. Prior to its collapse, FTX won the initial bid to buy the defunct firm’s assets. However, following the exchange’s collapse, Voyager’s attorneys said at a hearing that there would “be no transaction with FTX, I think that is quite obvious.” In December last year, Binance.US emerged as the ultimate winner of the bid.
The liquidation of Voyager’s crypto assets highlights the potential risks of storing funds on centralized exchanges. Crypto investors should be mindful of the exchange’s financial stability and reputation before using it for trading or storing digital assets.
Safeguarding Crypto Assets on Decentralized Exchanges
Decentralized exchanges (DEXs) are an alternative to centralized exchanges as they allow users to trade crypto assets without needing a third-party intermediary. DEXs have become increasingly popular due to their enhanced security and privacy features, lower fees, and more extensive asset offerings.
DEXs operate on blockchain technology, which ensures that transactions are secure, transparent, and immutable. The lack of a central point of control eliminates the risk of a single point of failure, reducing the risk of a security breach, or the loss of user funds due to internal mismanagement.
One of the most significant advantages of DEXs is their resistance to censorship. Centralized exchanges are subject to government regulations, and their operations can be restricted or shut down entirely. In contrast, DEXs operate on a distributed network, making them challenging to censor or shut down. This feature makes DEXs an ideal platform for users living in countries with stringent regulations or those concerned about their privacy.
Conclusion
The liquidation of Voyager’s crypto assets highlights the potential risks of storing funds on centralized exchanges. Crypto investors should be cautious when selecting exchanges to store or trade their digital assets. Decentralized exchanges are a safer and more secure alternative to centralized exchanges, as they offer enhanced privacy and security features, lower fees, and broader asset offerings. As the cryptocurrency industry continues to evolve, the use of DEXs is likely to increase, providing users with a more secure and private platform for trading and storing their digital assets.
