Key Takeaways
- District Judge Jennifer Rearden had granted the U.S. Department of Justice’s application(DOJ) for a stay on the proposed deal
- Earlier this month, Binance won court approval on the deal, agreeing to pay $20 million in cash to Voyager and to take on crypto assets deposited by Voyager customers.
On Monday, a federal Judge halted Voyager Digital’s $1 billion sale to Binance.US following an application by the United States Department of Justice seeking an emergency stay on the proposed deal.
District Judge Jennifer Rearden of the U.S. District Court for the Southern District of New York granted the U.S. Department of Justice’s application(DOJ) for a stay, therefore, putting the acquisition sale on hold.
The DOJ filed the emergency application for a stay on March 17 which was challenged by Voyager Digital. “Upon consideration of all parties’ written submissions, as well as the conferences and oral argument held in this matter, the Government’s emergency motion is hereby GRANTED. An opinion setting forth the reasons for this ruling will issue shortly,” the ruling reads.
Earlier this month, Binance won court approval on the deal, agreeing to pay $20 million in cash to Voyager and to take on crypto assets deposited by Voyager customers. As per the press release at the time, the Binance.US bid “aims to return crypto to customers in kind, in accordance with court-approved disbursements and platform capabilities.”
Binance US’s acquisition deal with Voyager has been subjected to regulatory scrutiny ever since Binance announced the deal in December 2022. The U.S. Securities and Exchange Commission initially had filed an objection to the deal in early January, seeking more details regarding the financial viability of Binance US’s business.
The SEC, which has objected to the sale, was also investigating whether Voyager’s crypto lending business involved the sale of unregistered securities. The Bankruptcy Judge Wiles, while granting the Binance.US acquisition of Voyager on March 7 had then stated that SEC wouldn’t be allowed to fine executives involved in Voyager Digital should it end up issuing bankruptcy tokens to help repay impacted customers,
Apart from the SEC and DOJ, the Texas State Securities Board and the Department of Banking had also objected to the proposed deal between Binance.US and bankrupt crypto lender Voyager Digital, claiming that Binance.US’s terms of service and restructuring plan contained a number of “inadequate” disclosures.
Voyager filed for bankruptcy protection last July while estimating that it had more than 100,000 creditors and somewhere between $1 billion and $10 billion in assets.
