Binance.US has overcome a significant obstacle in its pursuit to purchase the assets of bankrupt cryptocurrency lender Voyager Digital for a price exceeding $1 billion. Michael Wiles gave the acquisition the green light, a judge presiding over the bankruptcy case in the Southern District of New York, despite opposition from multiple parties.
Although the judge stated that he would continue to review the confirmation order, he supported confirming the agreement. Before the acquisition deal can be completed, Binance.US may need to address specific regulatory obstacles. The value of Voyager’s VGX token rose by more than 8% within minutes of the court’s decision.
Formulated as an alternative after FTX, the former bidder, declared bankruptcy protection in November, the strategy garnered a 97% approval rate from Voyager creditors, who reacted to the proposal. The proposal provides for recuperating almost 75% of their assets.
The lengthy meeting began with good news for creditors, as Voyager’s attorneys estimated that creditors might potentially collect 73% of their losses, up from a previous estimate of 51%.
Nevertheless, Texas and New Jersey officials have warned that these benefits could be severely diminished if FTX’s Alameda Research successfully recovers $445 million in loan repayments before its own November bankruptcy filing.
On Tuesday, after a four-day hearing, Judge Wiles ruled that despite the regulatory objections, the restructuring of Voyager must proceed. Throughout the hearing, a diverse group of witnesses testified on intricate matters, including transferring personal data to Binance.US as a component of the deal and why the transfer would be more favorable for creditors than rapid liquidation.
Creditors posed several inquiries to Voyager’s financial advisors, such as how to handle less common types of cryptocurrency assets and how to address customers residing in states such as New York, Texas, Vermont, and Hawaii, where Binance.US is not authorized to operate under current regulatory policies.
Additional barriers to the deal, posed primarily by skeptical regulators, have gone. Judge Wiles took a dim view of Securities and Exchange Commission arguments early in the hearing. Previous court documents suggested that Voyager reached an agreement with the Federal Trade Commission to avoid interfering with an investigation into fraudulent marketing.
During the hearing that commenced on Thursday, parties and regulators were provided with an opportunity to raise objections to the proposed sale. The judge later determined that several of these objections either lacked a strong argument or would have needlessly complicated the proceedings.
The speaker mentioned that they should have pursued legal action if the government intended to argue that Voyager’s sale of VGX tokens was a securities offering. This was in response to a statement made by an SEC attorney suggesting that the sale may be subject to securities laws. The speaker added that despite this, regulators took no legal action. Based on the evidence presented during the hearing, the speaker would have been compelled to rule that the transactions were legal.
The prospect that Voyager customer data, including Social Security numbers, might be shared with Binance.US and held in offshore systems was another issue voiced by stakeholders. A lawyer for Binance.US stated that no Binance.US workers would have access to such material.