Binance.US’s acquisition of Voyager Digital has faced opposition from the U.S. Securities and Exchange Commission (SEC) and the bankruptcy court, leading to a clash of wills. However, the Southern District of New York’s Judge Michael Wiles has ruled that Binance.US can proceed with the $1 billion purchase of Voyager’s assets. This decision comes after the judge dismissed a request from the SEC to halt proceedings until an appeal is heard. The ruling was a relief to Voyager’s customers who had been unable to access their cryptocurrencies since the company filed for bankruptcy in July 2022.
The SEC’s Motion to Halt Proceedings
The SEC filed a motion to halt the proceedings after Binance won court approval to buy Voyager’s assets. The regulator argued that bankruptcy courts do not have the power to release debtors or non-debtors from police and regulatory powers. The U.S. Attorney, Damian Williams, stated that the deal should be altered or overturned since it tries to clear Voyager and its employees of breaching any tax or securities laws. However, Judge Wiles argued that the agreement did not clear Voyager of any wrongdoing and that continuing to delay would harm Voyager’s customers.
The Acquisition Deal
Under the terms of the acquisition deal, Voyager’s creditors have a chance of recouping 73% of their losses. The court has already heard from several witnesses who testified on various complicated subjects, such as whether personally identifiable information will be transferred to Binance.US as part of the settlement. The court also considered how the transition would be a more prudent method for creditors than undergoing an emergency liquidation. The acquisition deal has been seen as a positive step for Voyager’s customers who have been struggling to access their funds since the company filed for bankruptcy.
Acquisition of Voyager’s Assets
Judge Wiles’ ruling was seen as a significant victory for Binance.US as the company can now proceed with the acquisition of Voyager’s assets. The judge dismissed the SEC’s motion, stating that the regulator’s documents exaggerate and mischaracterize what he has done and the authorities on which he has relied. The judge also accused the SEC of relying on hyperbole and ‘straw man arguments. He argued that the timely resolution of bankruptcy cases is in the public interest and that a stay would adversely affect thousands of customers.
Repayment Tokens
The court gave Binance.US the go-ahead to issue and distribute repayment tokens to Voyager’s customers who were adversely affected. The repayment tokens are seen as a way to compensate customers who have been unable to access their cryptocurrencies since Voyager filed for bankruptcy. The tokens will be issued to customers on a pro-rata basis, depending on the amount of cryptocurrency held with Voyager. The tokens will also be tradeable on Binance.US’s platform, giving customers the option to trade them for other cryptocurrencies or cash them out.
The repayment tokens are intended to provide a means of compensation for affected customers while the bankruptcy case is ongoing. It remains to be seen how the tokens will be received by the customers and whether they will provide a satisfactory resolution to their grievances.
Conclusion
Binance.US’s acquisition of Voyager Digital has faced opposition from the SEC and the bankruptcy court. However, Judge Wiles’ ruling has allowed Binance.US to proceed with the acquisition of Voyager’s assets. The acquisition deal is seen as a positive step for Voyager’s customers who have been struggling to access their funds since the company filed for bankruptcy.
