U.S. DOJ Objects to Binance US Acquisition of Voyager

Appeals Against Acquisition of Voyager

The U.S. Department of Justice and the U.S. Attorney’s Office for the Southern District of New York have filed an appeal against the court’s decision to approve the acquisition of Voyager Digital by cryptocurrency exchange Binance US.

A bankruptcy court judge approved a restructuring plan for bankrupt cryptocurrency investment platform Voyager on the 7th. As part of that, it just authorized the acquisition of Voyager assets of Binance US, the US version of Binance.

So far, the reasons for the appeal have not been elaborated. Attorneys for the U.S. Justice Department’s Federal Trustees’ Office and the U.S. Attorney’s Office, however, opposed some of the provisions during hearings on the Voyager bankruptcy plan.

This provision was included by Voyager and is intended to protect Voyager employees from legal claims for conduct during bankruptcy.

The Justice Department took issue with Judge Michael Wiles’ order that approved the plan because it was written in such a way that it would have broadened the scope of protection. He objected that if Voyager’s wrongdoing was later discovered, it could prevent regulatory enforcement action and criminal prosecution.

Meanwhile, Judge Wiles dismissed the dissent, saying Voyager and its employees should not be penalized for carrying out the court-approved asset sale to Binance US.

The U.S. Securities and Exchange Commission (SEC) also objected to the acquisition, arguing that Binance.US “may be an unregistered stock exchange.” Judge Wiles had just dismissed that allegation as having “no evidence.”

connectionUS Court Judge Approves Binance US Acquisition of Voyager

What is the route to return of customer funds?

If U.S. authorities block a transaction between Binance and Voyager, Voyager still has the option of dismantling and liquidating the business.

The return of customer funds was also expected in the acquisition by Binance US. Binance US has agreed to pay Voyager approximately 2.7 billion yen ($20 million) in cash and take over cryptocurrencies deposited by Voyager customers.

Voyager’s lawyers estimated that 73% of customer assets in custody could be recovered by Binance US through the acquisition of the company. Also, 97% of Voyager creditors voted in favor of a deal with Binance US.

Voyager filed for bankruptcy in Chapter 11 last July, affected by a chain of defaults in the cryptocurrency market. Customers have been unable to withdraw their assets deposited on the platform since July.

After that, in December, as a result of the auction, Binance US offered the highest price of about 140 billion yen and won Voyager’s assets. Currently, it is in the stage of approval procedures by the court.

Investigation by the Committee on Foreign Investment in the United States

In addition to allegations by the U.S. Department of Justice and others, investigations by the Commission on Foreign Investment in the United States (CFIUS) could also pose hurdles to future deals.

CFIUS is investigating the acquisition by Binance US for the risks associated with investing in the US by foreign companies. At present, the company has not objected to the acquisition, but said it may suspend the transaction depending on the results of the investigation.

Binance US said the company is based in the US and is “completely independent” of its global parent company, Binance.