A U.S. bankruptcy judge declined to delay the $1.3 billion sale of crypto lender Voyager Digital to Binance.US, saying Voyager customers should not be forced to wait out a challenge by the Department of Justice that is unlikely to succeed.
Judge Michael Wiles in Manhattan ruled on Wednesday that the department had mischaracterized the scope of legal protections he had granted to Voyager employees for actions to carry out the sale and rebalance its crypto portfolio.
Financial Post Top Stories
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300
Wiles, who is overseeing Voyager’s Chapter 11 process,
Advertisement 2
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Unlimited online access to articles from across Canada with one account
- Get exclusive access to the National Post ePaper, an electronic replica of the print edition that you can share, download and comment on
- Enjoy insights and behind-the-scenes analysis from our award-winning journalists
- Support local journalists and the next generation of journalists
- Daily puzzles including the New York Times Crossword
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Unlimited online access to articles from across Canada with one account
- Get exclusive access to the National Post ePaper, an electronic replica of the print edition that you can share, download and comment on
- Enjoy insights and behind-the-scenes analysis from our award-winning journalists
- Support local journalists and the next generation of journalists
- Daily puzzles including the New York Times Crossword
REGISTER TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
approved
its bankruptcy plan last week.
The government can “can step in at any time” if it believes illegal transactions are happening, but has not presented any evidence that Voyager’s crypto transactions are illegal, Wiles said.
The U.S. Attorney’s Office for the Southern District of New York and the Office of the U.S. Trustee, the Justice Department’s bankruptcy watchdog, both filed appeals last week. They argued that the protections could rubber stamp crypto transactions that might be illegal under U.S. securities laws.
Voyager and the DOJ did not immediately respond to requests for comment. Voyager had previously said its customers should not be forced to “stand idly” during a lengthy appeal process.
Advertisement 3
Binance.US has agreed to pay $20 million in cash to Voyager, and take on crypto assets deposited by Voyager customers. Those assets, valued at $1.3 billion in February, account for the bulk of the deal’s valuation, according to Voyager.
Voyager said earlier this month it could still pull out of the deal and make an effort to return customer funds without outside help.
Voyager filed for bankruptcy in July, months after the crash of major crypto tokens TerraUSD and Luna sent shockwaves across the digital asset industry. (Reporting by Dietrich Knauth in New York; Editing by Alexia Garamfalvi and Richard Chang)