Judge Denies Government’s Request to Pause Voyager-Binance Deal

U.S. bankruptcy judge Michael Wiles has denied the U.S. government’s appeal to that would have further delayed the deal between crypto lender Voyager Digital and cryptocurrency exchange Binance.US.

According to court documents filed on 15 March, Wiles argued that the U.S. government had not provided good enough reasoning to delay Voyager Digital’s bankruptcy restructuring plan for another two two weeks. The bankruptcy judge also noted that protracting the deal will further harm the interests of Voyager’s former clients, who have been unable to access their crypto since July. Judge Wiles said:

“A stay could threaten the availability of that transaction, and the uncontroverted evidence before me at the confirmation hearing is that a loss of the Binance.US transaction would lead to a reduction of approximately $100 million in the assets available for distribution to creditors. The stay the Government seeks would also postpone the Debtors’ ability to implement their “toggle” plan, and would further delay distributions to customers.”

The request to halt the asset acquisition between Voyager and Binance was made on 14 March by U.S. attorney Damian Williams, who argued that a provision in the deal could effectively absolve Voyager and its staff of violations of tax and securities law. The provision in question protects those involved in carrying out the sale from being held personally liable for its implementation.

Wiles, however, said the government’s accusations were exaggerated, mischaracterizing, rely on hyperbole, and on the “straw man” arguments. The judge further noted that the provisions in the deal “do not prohibit any regulatory action”, including actions to stop the sale of crypto and distributions that the restructuring plan contemplates.

Voyager Digital won the court’s approval to sell $1 billion worth of digital assets to Binance.US, and issue repayment tokens to impacted customers, last Tuesday. At the time, judge Wiles also rejected a series of arguments from the U.S. Securities and Exchange Commission (SEC), which claimed the deal could potentially violate U.S. securities laws.