U.S. judge refuses to delay $1.3b Voyager- Binance.US deal

The U.S. Attorney’s Office for the Southern District of New York and the Office of the U.S. Trustee both filed appeals last week

A U.S. bankruptcy judge refused to hold up the $1.3b sale of crypto lender Voyager Digital to Binance.US, stating Voyager customers should not be compelled to wait out a challenge by the Department of Justice (DoJ) that is not likely to succeed.

Judge Michael Wiles in Manhattan ruled on Wednesday that the DoJ had mischaracterized the scope of legal safeguards he had granted to Voyager staff for actions to carry out the sale and rebalance its crypto portfolio.

Wiles, who is supervising Voyager’s Chapter 11 procedure, approved its bankruptcy plan last week.

The government can ‘can step in at any time’ if it thinks unlawful transactions are taking place, but has not presented any proof that Voyager’s crypto transactions are unlawful, he said.

The U.S. Attorney’s Office for the Southern District of New York and the Office of the U.S. Trustee, the bankruptcy watchdog of the Justice Department, both filed appeals last week. They contended that the safeguards could approve crypto transactions that might be unlawful under U.S. securities laws.

Voyager had earlier said its customers should not be compelled to ‘stand idly’ during a long appeal process.

Binance.US has agreed to pay $20m in cash to Voyager, and take on crypto assets deposited by Voyager customers. Those assets, valued at $1.3b in February, account for the bulk of the deal’s valuation, as per Voyager.

Voyager said earlier this month it could still pull out of the deal and try to return customer funds without outside assistance.

Voyager filed for bankruptcy in July, months after the collapse of leading crypto tokens TerraUSD and Luna sent shockwaves across the digital asset industry.