A U.S. bankruptcy judge has given troubled crypto lender Voyager Digital his approval to continue its restructuring plan, and sell some of its assets to Binance.US for more than $1 billion, Bloomberg reported on 7 March.
According to the publication, Judge Michael Wiles gave Voyager the permission to close the Binance.US deal and issue repayment tokens to affected customers despite the objections raised by the Securities and Exchange Commission (SEC). Wiles rejected the regulator’s arguments that the redistribution of funds from Voyager to Binance.US could potentially violate U.S. securities laws, and criticized the SEC for attacking the sale without first concluding if it was illegal. Judge Wiles stated:
“I cannot put the entire case into indeterminate deep freeze while regulators figure out whether they believe there are problems with the transaction and plan.”
The bankrupt crypto lender will now have a few weeks to decide on whether to sell a portion of its assets to Binance.US for $1 billion, or liquidate the assets on its own and transfer the funds to Voyager account holders. A lawyer for Voyager, however, said that creditors could potentially make a 73% recovery if the deal goes through, although that number could go down to 48% if claims from FTX and Alameda Research were successful.
Following Judge Wiles approval of the deal, the price of Voyager’s VGX token shot up by more than 55%, increasing from $0.37 to $0.61 over the last 24 hours. The bankruptcy court approval of the deal came only a week after 97% of 61,000 Voyager account holders — which represented 98% of total claims — voted in favor of the Binance.US restructuring plan.