Actions from US SEC
The US Department of Justice is said to have filed an appeal last Thursday evening challenging the New York bankruptcy judge’s approval of Binance US’s billion-dollar proposal to acquire the assets of defunct cryptocurrency lender Voyager Digital. The appeal was purportedly filed by the United States Trustee’s Office, which is a division of the Department of Justice in charge of managing bankruptcies. Furthermore, the appeal was apparently filled a day after Judge Michael Wiles approved the deal following a controversial four-day marathon hearing.
Regulators Versus Judge Regarding the Proposed Sale
Several state regulators, as well as the US Securities and Exchange Commission, were said to be vehemently opposed to the proposed sale. It should be noted that the Securities and Exchange Commission has filed an objection to the purchase of Voyager. According to reports, the alleged objection is based on their contention that Binance.US may be breaching federal securities laws by operating an unregistered stock exchange in the United States.
On the other hand, Judge Wiles seemed to be unmoved by the said concerns raised by the Securities and Exchange Commission. The said judge allegedly reminded the lawyers present at the hearing that the Bankruptcy Code “doesn’t contemplate an endless period of time.” The same judge further added that things have to be done.
Judge Wiles’ Claims
Additionally, Judge Wiles has also stated that there are creditors waiting and in the midst of the uncertainty brought by the circumstance. The same judge has also highlighted that the said creditors currently do not have access to the assets in which they’ve invested, in some cases, their life savings. This circumstance is what allegedly fuels the judge to move into action.
According to reports, Voyager’s clients should enjoy a 73% recovery under the contentious proposed sale to Binance. The aforementioned strategy, which apparently has the support of 97% of Voyager’s creditors, allegedly got underway after FTX, Voyager’s previous highest bidder, filed for bankruptcy back in November 2022.
Voyager will be forced to follow its plan B in the event that it decides not to proceed with the aforementioned strategy, selling itself to Binance US, or in the unlikely event that regulators are successful in blocking the sale. The second alternative mentioned would force the bankrupt lender to liquidate itself, which would probably give creditors substantially lower rewards.