The U.S. Department of Justice (DOJ) late Thursday night appealed a New York bankruptcy judge’s decision to allow Binance.US’ multi-billion dollar plan to acquire the assets of bankrupt crypto lender Voyager Digital.
The appeal, filed by the US Trustee’s Office — a branch of the DOJ responsible for overseeing bankruptcies — comes just a day after Judge Michael Wiles approved the deal after a controversial four-day marathon hearing.
Regulators, including the US Securities and Exchange Commission (SEC) and various state regulators, have strongly opposed the proposed deal. Last month, the SEC filed an objection to Voyager’s purchase, arguing that Binance.US may violate federal securities laws by operating an unregistered securities exchange in the United States
However, Judge Wiles appeared unperturbed by the SEC’s concerns, telling attorneys present at the hearing that the bankruptcy law “does not allow for an indefinite period of time.”
“Things have to get done. We have creditors waiting and amidst all this uncertainty they don’t have access to properties they have invested in, their life savings in some cases, so we have to do something,” Wiles said. “We have to do something.”
As part of the proposed sale to Binance.US, Voyager customers would see an estimated 73% recovery. The plan, put together after FTX — Voyager’s previous top bidder — filed for its own bankruptcy in November, had the backing of 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 successfully block the sale — another possibility is that the bankrupt lender will liquidate itself, likely resulting in much lower returns would lead to creditors .