The US Reaffirms Its Efforts To Prevent Binance From Buying Voyager

In an attempt to block key parts of the sale of bankrupt Voyager Digital Ltd. to Binance.US, the American arm of Binance, the world's largest crypto exchange, while the government appeals the decision of a federal judge to approve the sale, US officials are trying to block key parts of the deal.

‍

Justice Department lawyer said in court on Tuesday that the government opposes any limits on the government's ability to punish anyone involved in the proposal and the related bankruptcy-exit plan that US Bankruptcy Judge Michael E. Wiles approved last week.

‍

Assistant US Attorney Larry Fogleman told Wiles that although some aspects of Voyager's Chapter 11 plan could go forward, the legal protections that were included would not, according to Fogleman. Wiles agreed to hold a hearing on Wednesday to decide whether to block the exculpation provisions included in the plan or not. The provisions, which are routinely included in corporate bankruptcy cases, ensure that people will not be held personally accountable if they implement a plan that has been approved by the court.

‍

The judge spurned the regulators and Binance.US can now buy Voyager

‍

There are two options under Voyager's bankruptcy plan: Either it will sell itself to Binance.US or it will liquidate its assets and distribute the money to its creditors as part of its bankruptcy plan. After four contentious days of bankruptcy proceedings, Wiles gave the company the authority to do either of these things.

‍

Lawyers for the US Securities and Exchange Commission, however, claim that portions of the deal and the plan are illegal under federal law. It was also argued by the SEC and other federal lawyers that the bankruptcy plan might undermine future efforts to police the cryptocurrency markets in the future. As a result of Wiles' approval of the plan, the US has appealed it. 

‍

As a result of the dispute, it is revealed that there is a growing conflict between the SEC's increased regulatory push and the efforts made by the SEC to rehabilitate troubled crypto companies.

‍

Voyager estimated back in January, in a court filing, that customers may be able to get back about half of what they are owed as a result of the plan. On the basis of recent crypto coin prices, Voyager's attorney Christine A. Okike told Wiles that the recovery estimate had climbed to about 73% by the time the court fight began last week.

‍

Voyager Digital Holdings Inc. is in bankruptcy, 22-10943, Bankruptcy Court for the Southern District of New York.

‍