The US Department of Justice (DOJ) filed an appeal late Thursday challenging a New York bankruptcy judge’s ruling allowing Binance.US’s billion-dollar plan to acquire the assets of bankrupt crypto lender Voyager Digital. Was.
The appeal, filed by the Office of the US Trustee – a branch of the DOJ responsible for overseeing bankruptcy – comes just a day after Judge Michael Wiles approved the deal following a contentious, four-day marathon hearing.
Regulators including the US Securities and Exchange Commission (SEC) and various state regulators have strongly opposed the proposed deal. Last month, the SEC filed an objection to Voyager’s purchase, arguing that Binance.US could be violating federal securities laws by operating an unregistered securities exchange in the US.
However, Judge Wills appeared unfazed by the SEC’s concerns, telling attorneys present at the hearing that the Bankruptcy Code “does not contemplate endless periods of time.”
“Things have to be done. We have creditors who are waiting and who in the midst of this uncertainty do not have access to assets in which they have invested, in some cases, their life savings, so we have to take some sort of action, Wiles said. “We have to do something.”
Under the proposed sale to Binance.US, customers of Voyager would see an estimated 73% recovery. The plan, which was drawn up after FTX – Voyager’s previous top bidder – filed for its own bankruptcy in November, was supported by 97% of Voyager’s creditors.
If Voyager decides not to go through with the current plan to sell itself to Binance.US — or if regulators are successful in blocking the sale — another option is for the insolvent lender to liquidate itself, resulting in creditors’ rights. There will be very little return potential.