US Department of Justice Opposes Sale of Voyager Digital to Binance.US, Appeals Judge Ruling – Here’s the Latest

Just a day after a judge allowed bankrupt crypto lender Voyager Digital to sell its assets to crypto exchange Binance.US, the US Department of Justice (DOJ) appealed to block the sale by filing a call that could derail her.

Filed in the U.S. Bankruptcy Court for the Southern District of New York, the appeal was filed by the U.S. Trustee’s Office, a branch of the department responsible for overseeing the administration of bankruptcy records and private trustees.

Earlier this month, US bankruptcy judge Michael Wiles gave the go-ahead to Voyager’s restructuring plan during a hearing in New York, allowing the collapsed lender to sell its assets to Binance.US as part of a of a deal estimated at around $1.3 billion. Wiles authorized the restructuring plan despite an objection filed by the US securities regulator, the Securities and Exchange Commission (SEC). The judge dismissed the agency’s opposition to the planned deal, ignoring SEC concerns about Binance.US, which operates an unregistered stock exchange.

Once the sale is complete, Voyager customers would be allowed to make withdrawals, with an estimated recovery rate of 73% of the value of their deposits at the time the lender filed for bankruptcy.

If the deal is canceled and Voyager cannot find another buyer for its assets, the collapsed company could also make the decision to liquidate. However, this would most likely generate much lower returns for its creditors, according to the official Voyager Committee of Unsecured Creditors.

“The Binance.US transaction will result in greater recoveries for creditors than a reverse charge,” the committee said in a statement. Tweeter last January.

“Binance.US has agreed to make a number of important changes. In summary, crypto will only be transferred from Voyager to http://Binance.US when creditors can withdraw it immediately, and transfers will occur weekly,” according to the committee.

The struggling crypto lender filed for Chapter 11 bankruptcy last July. The move sparked a bidding war between major exchange Binance and rival platform FTX. In October 2022, the Sam Bankman-Fried exchange obtained approval from a US bankruptcy court for its proposed acquisition of Voyager’s assets. However, FTX’s collapse soon after prevented it from finalizing the deal and paved the way for the Changpeng ‘CZ’ Zhao exchange to return to the negotiating table. As a result, in mid-December 2022, Binance.US announced that it would take over Voyager’s assets. The SEC expressed its opposition to the deal last January.