Key Points:
- Voyager Digital gained preliminary court clearance for its plan to sell $1.02 billion worth of assets to Binance.US.
- Voyager is trying to hasten the review of its request to sell assets to Binance. US, which can cause the agreement to be delayed or blocked.
- Voyager Official Committee of Unsecured Creditors, which represents creditors without security interests in Voyager, supported the deal in its current form, pointing out that it would yield greater recoveries for creditors than if Voyager liquidated its holdings itself, as would happen if CFIUS rejects the deal.
Voyager Digital, a bankrupt cryptocurrency lender, gained preliminary court clearance for its plan to sell $1.02 billion worth of assets to Binance.US.
The decision was made in the midst of a national security investigation into Binance. The US that Voyager is attempting to accelerate.
Judge Michael Wiles permitted Voyager to sign the asset acquisition agreement and request creditor approval on January 10 in the United States Bankruptcy Court for the Southern District of New York, but the sale won’t be complete until a subsequent court hearing, according to a Jan. 11 Reuters report.
It happens when Voyager is trying to hasten the review of its request to sell assets to Binance. US, which can cause the agreement to be delayed or blocked.
During the court hearing, Voyager’s attorney Joshua Sussberg stated that the company has been responding to inquiries from the Committee on Foreign Investment in the United States (CFIUS) and will address any issues the committee may have that could lead it to oppose the deal.
“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 interagency organization that assesses foreign investments in or acquisitions of American businesses for potential threats to national security.
CFIUS finds that the transaction raises legitimate national security concerns
If CFIUS finds that the transaction raises legitimate national security concerns, it may prohibit or reverse the transaction or order the parties to make changes to allay the concerns.
On December 30, CFIUS notified the court that “one or more transactions anticipated” by Voyager may be the subject of a review, which might lead to delays or blockages.
The U.S. attorney’s office is apparently looking into Binance’s global operation amid allegations of money laundering, but Changpeng “CZ” Zhao, the CEO, has denied any wrongdoing. US has its main office in California and bills itself as “totally independent.“
Zhao is a Chinese-born citizen of Canada, and CFIUS is empowered to examine any transactions that potentially give a foreign person equity interest in or control over a U.S. company.
The Voyager Official Committee of Unsecured Creditors, which represents creditors without security interests in Voyager, supported the deal in its current form, pointing out that it would yield more significant recoveries for creditors than if Voyager liquidated its holdings itself, as would happen if CFIUS rejects the deal.
The bankrupt lender had already refuted Jan. 8 objections to the acquisition proposal from Alameda Research, the Securities and Exchange Commission (SEC), four US states, and the US trustee.
It stated that the deal serves the interests of its creditors to the greatest extent possible and that the objections “fail to put up any factual or legal evidence” for their claims. Voyager announced their agreement with Binance on December 19.
US’s offer to purchase its assets in the $1.022 billion transaction following the prior $1.4 billion agreement with FTX. After the collapse of the crypto exchange, the US failed.
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