The US Department of Justice (DOJ) appealed late Thursday night against a New York bankruptcy judge’s decision to allow Binance.US’ billion-dollar plan to acquire the assets of bankrupt cryptocurrency lender Voyager Digital.
The appeal, which was filed by the US Trustee’s Office — a branch of the DOJ responsible for overseeing bankruptcy — comes just one day after Judge Michael Wiles approved the deal following a controversial four-day marathon hearing.
Regulators, including the U.S. Securities and Exchange Commission (SEC) and several state regulators, strongly opposed the proposed deal. Last month, the SEC filed an objection to the purchase of Voyager, arguing that Binance.US may be violating federal securities laws by operating an unregistered stock exchange in the US
However, Judge Wiles seemed unimpressed by the SEC’s concerns, telling attorneys present at the hearing that the bankruptcy law “does not contemplate an endless period.”
“Things have to happen. We have creditors who are waiting and who, in the midst of all this uncertainty, don’t have access to real estate that they’ve invested, in some cases their savings, so we have to take some action,” Wiles said. “We have to do something.”
Under the proposed sale to Binance.US, Voyager’s customers would see an estimated 73% recovery. The plan, which came about after FTX – Voyager’s previous highest bidder – filed for bankruptcy in November, was backed by 97% of Voyager’s creditors.
If Voyager decides not to go through with its current plan to sell itself to Binance.US – or if regulators succeed in blocking the sale – another option is for the bankrupt lender to liquidate itself, which would likely result in much smaller returns for creditors. .