Voyager Digital Holdings, a bankrupt cryptocurrency lender, has reached an agreement with the federal government of the United States. The agreement advances a $1 billion proposal that would allow Voyager to sell its assets to Binance’s US affiliate. The agreement to trade was pending a hearing for Binance’s previous tax violations. However, it appears that the agreement has been finalised before the hearing.
The plea to make this deal was made in December 2022. Judge Michael Wiles of the United States Bankruptcy Court approved the deal earlier in March. However, District Judge Jennifer Rearden announced this week that she would put that on hold while she weighed the US Attorney’s arguments. It was argued that the deal effectively rendered Voyager immunity by exonerating it from tax or securities law violations.
A district court in New York ruled Friday that the United States had a “substantial case on the merits” in its quest to block a $1 billion transaction by Binance.US. This was being done to purchase the assets of bankrupt crypto lender Voyager Digital. Rearden stated that she would attempt to settle the dispute as soon as possible since delays may cost the estate up to $10 million each month.
According to the April 19 petition, the problematic “exculpation provisions” should be put on hold until the appeal is resolved, but not the remaining components of the accord. the paperwork has been signed by the United States Attorney and a United States Trustee, as well as lawyers for Voyager and its creditors. The only person to hold out on signing the document is Judge Jennifer Rearden. However, the Voyager Official Committee of Unsecured Creditors claimed in a series of tweets on April 19 that all parties agreed on the agreement given that “appeals will continue with respect to the Plan’s exculpation provision.”
Since the deal’s clearance to proceed on March 7, US regulators have made repeated attempts to block it. On March 14, the administration sought a two-week postponement in the bankruptcy plan. It accused the bankruptcy plan of “protecting fraud, theft, or tax evasion.” The motion, however, was refused.
Lawyers for the insolvent company are concerned that after a four-month deadline passes, Binance.US would walk out of the contract. If this occurs, the estate would incur an additional $100 million loss. In an April 11 order, justices on the Second Circuit Court of Appeals denied another attempt to expedite the process.
According to a court filing on February 28, 97% of the 61,300 Voyager account holders supported the arrangement with Binance. Since filing for Chapter 11 bankruptcy in July, Voyager has been actively coordinating a strategy for the allocation of money to creditors. This deal getting cancelled shall add more troubles for their firm. This court filing shall prevent many of its investors from pulling out.
