A bankruptcy judge has approved Binance.US to acquire Voyager Digital’s assets and return money to the company’s customers. Binance US is set to acquire the assets of bankrupt Voyager and handle customer returns independently, despite regulatory objections.
The SEC initially objected to the deal, asking for more details on Binance US’s financial viability. The SEC argued that Voyager’s VGX token may be an unregistered security. Consequently, returning assets to customers could be in violation of rules on the sale of unregistered securities. Moreover, the SEC called Binance US an unregistered securities exchange.
Bankruptcy Judge Approves Binance US Deal for Voyager
Various objections to the deal were filed by the Federal Trade Commission and by Texas regulators, including the Texas State Securities Board and the Texas Department of Banking. However, the judge was unconvinced by the objections and approved Voyager’s restructuring plan centered around the Binance.US acquisition.
Most recently, Damian Williams, the U.S. Attorney for the Southern District of New York, deemed it “blatantly illegal” to attempt to receive legal protection against potential civil or criminal fraud charges. The securities regulator in the state of New Jersey has also expressed their support for this opposition.
At a hearing in New York, U.S. Bankruptcy Judge Michael Wiles gave the green light to Voyager’s reorganization strategy that centers on Binance.US purchasing the company. As a component of the agreement, Binance has agreed to provide Voyager with $20 million in cash. In turn, Binance US would take on the responsibility for the virtual currency assets that Voyager’s clients have deposited.
Voyager reported that the majority of the deal’s worth comes from the customers’ cryptocurrency assets. Those assets were valued at $1.3 billion in February.
Wiles has approved the restructuring plan despite the “vague” objection of the U.S. Securities and Exchange Commission towards the Binance acquisition.
Wiles has given Voyager the green light to proceed with its plan of transferring customer accounts to Binance. However, Voyager still retains the option to withdraw from the deal.
In court on Friday, financial advisors stated that it would take up to four weeks for the company to examine new queries regarding Binance US’ dedication towards the acquisition, regulatory compliance, and customer deposit security.
The transaction is further undergoing examination by the Committee on Foreign Investment in the United States, also known as CFIUS, to assess the potential national security threats that may arise from foreign investment in Voyager.