The intended sale of Voyager Digital to Binance.US has been put on hold for the time being by Judge Jennifer Rearden, a newly appointed federal judge for the US District Court in the state of New York.
According to the ruling that was handed down (1), the previously proposed sale of one billion dollars won’t be finalized until after a decision has been reached about the specifics of the closing stages of the bankruptcy process.
The order to defer the execution of the purchase was granted to give the government adequate time to prepare for the appeal of the ruling passed by Judge Michael Wiles back on March 7. In her own words and highlighting the order that was handed down, Judge Rearden declared as follows:
“The Government’s emergency application is hereby GRANTED after review of the written submissions made by all parties, as well as the meetings and oral argument that were held in this issue.”
According to the Judge, a thorough opinion on why she took the stance will be released at a later date, and industry players are already expecting the insights that will be gathered from the message that will be published later.
Voyager Digital applied for Chapter 11 bankruptcy in July of 2022, and since then, the firm has been quite proactive in the hunt for alternatives that would help it return both its secured & unsecured creditors.
One of the potential alternatives that were investigated was selling the business to FTX Derivatives Exchange; however, this course of action was abandoned after the trading platform encountered similar difficulties in the final three months of the previous year.
It was discovered in a court filing in February that the reorganization plans included the sale of its assets, and almost 97% of the 61,300 creditors supported the transaction.
Binance was discovered to be the subsequent best alternative, and the government has never been supportive of the United States.
If the proposal is successful, customers of Voyager Digital will be able to retrieve as much as 73 percent of the assets that they have stored on the platform.
The controversy around the Binance.US and Voyager Digital Agreement
During the time of the sale and the tendering process, US officials have voiced concerns about the possibility of the company being sold to Binance. The Department of Justice took the conclusion that selling Voyager Digital to Binance was not in the public interest.
The United States will make committing tax evasion, theft, and fraud easier.
When Judge Wiles issued his first verdict, he disagreed with the assessment that the regulators had made.
But, the most recent position of Judge Rearden will provide adequate time for the regulators to establish their case, and this could result in the decision being reversed.
Although it is presumed that the recent crackdown and lawsuit levied against Binance by the United States Commodities Futures Trading Commission (CFTC) for breaking American derivatives legislation might not be connected, it might nonetheless hinder the entire sale process.
Voyager Digital may want to refrain from doing anything that will only further complicate its intentions for reorganizing its business in the future because there is a very high level of unpredictability around Binance as both a company and a cryptocurrency trading organization.
The Voyager Committee of Unsecured Creditors has stated that it will maintain its opposition to the government’s effort to scuttle the deal.
Featured Image from (1.1)