Key Points:
- The US government’s motion to temporarily suspend Voyager’s bankruptcy plan was approved by a federal court, putting the crypto lender’s anticipated sale to Binance.US on hold.
- The official creditor committee of Voyager is investigating the incident.
A federal court temporarily halted insolvent Voyager Digital’s intended $1.3 billion sale to crypto exchange Binance.US, giving the US government more time to pursue appeals challenging the deal’s legality.
District Judge Jennifer Rearden of the United States District Court for the Southern District of New York granted the United States Department of Justice’s (DOJ) request for a stay of proceedings pending an appeal of the transaction, which had previously been permitted by a bankruptcy court. The transaction is halted until the appeal is resolved in the United States legal system.
In early March, the United States Attorney’s Office for the Southern District of New York and the Office of the United States Trustee, the Department of Justice’s bankruptcy monitor, filed appeals against a bankruptcy court’s approval of the transaction.
They said that the safeguards might be used to rubber stamp crypto tokens that are unregistered securities, as well as transactions that are prohibited under US securities regulations.
The court felt that authorities such as the Securities and Exchange Commission (SEC) and the US Trustee’s office had failed to present a compelling argument for delaying the sale and that his job was to expedite the bankruptcy process so that Voyager creditors received their money as quickly as.
The agreement represents a setback for Voyager, which has been attempting to emerge from bankruptcy and compensate its clients since filing for Chapter 11 bankruptcy protection last year. The planned sale to Binance’s US branch is valued at over $1 billion, mostly based on the value of Voyager’s client accounts.
The official creditor committee of Voyager said that they are studying the issue and would continue to vigorously fight the Government’s initiatives.
Another court, New York Southern Bankruptcy Court Judge Michael Wiles, authorized the transaction earlier this month over government agency objections.
The US Commodities Futures Trading Commission (CFTC) sued Binance and its CEO Changpeng Zhao (CZ) on Monday in a separate legal action, saying that CZ ran an illegal exchange.
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Harold
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