Voyager Digital, a crypto lending firm, is facing objections from the Securities and Exchange Commission
Voyager Digital, a crypto lending firm, is facing objections from the Securities and Exchange Commission (SEC) over its restructuring plan to sell its assets to Binance.US. According to a report by Reuters, US bankruptcy judge Michael Wiles scolded the SEC for its ambiguous reasoning for objecting to the proposed sale during a hearing in a New York court. Wiles demanded specifics on the SEC's concerns and accused the regulator of asking to "stop everybody in their tracks" without offering a solution.
The restructuring plan, announced on December 19, 2021, aims to bring Voyager out of Chapter 11 bankruptcy, with Binance.US acquiring its assets for $1.02 billion, which Voyager considers to be the "highest and best bid for its assets." However, the SEC filed an objection to the sale on February 22, 2022, citing possible breaches in securities laws regarding the crypto transactions necessary to rebalance funds and redistribute them to Voyager account holders.
During the court hearing, SEC attorney William Uptegrove gave a reserved answer to Judge Wiles when asked if the regulator believed the plan violated the law, saying, "We can't take a position at this point. The SEC is a deliberative body, and its process is a nonpublic one by federal law." In response, Wiles demanded specifics on the SEC's concerns, stating, "If there are reasons to be concerned here, I need to hear specifics."
The sale requires court approval, as well as clearance from the SEC and the Committee on Foreign Investment in the United States (CFIUS), which is currently reviewing the deal for potential foreign investment and national security concerns. Judge Wiles is set to hear continued arguments on the bankruptcy plan on March 3.
Under the proposed Binance.US plan, Voyager customers would be transferred to the crypto exchange, and they would be able to withdraw their funds for the first time since the platform filed for bankruptcy in July 2021. Customers would reportedly recover over 70% of their deposited value at the time of the bankruptcy, and the plan was favored by 97% of Voyager's customers, according to a poll of 61,300 account holders with claims against the crypto lender.