The U.S. Department of Justice (DOJ) has filed an appeal challenging the recent decision by a New York bankruptcy judge to approve Binance.US’s billion-dollar plan to acquire the assets of bankrupt crypto lender, Voyager Digital.
The U.S. Trustee’s Office, a branch of the DOJ responsible for overseeing bankruptcies, filed the appeal just one day after Judge Michael Wiles approved the deal.
The four-day-long hearing had been contentious, with various regulators, including the U.S. Securities and Exchange Commission (SEC) and state regulators, opposed to the proposed deal.
Last month, the SEC filed an objection to the purchase of Voyager, citing concerns that Binance.US may be violating federal securities laws by operating an unregistered securities exchange in the U.S.
However, Judge Wiles appeared to be unperturbed by the SEC’s concerns, stating that the Bankruptcy Code “doesn’t contemplate an endless period of time.” The judge added that creditors have been waiting for resolution, with some having invested their life savings into Voyager, and that “we have to take some kind of action.”
Under the proposed sale to Binance.US, Voyager’s customers could see an estimated 73% recovery. The plan was supported by 97% of Voyager’s creditors, who approved the sale after FTX, Voyager’s previous top bidder, filed for its own bankruptcy in November.
If regulators are successful in blocking the sale or if Voyager decides not to go through with the current plan, the bankrupt lender may have to liquidate, resulting in smaller returns for creditors.
