- The U.S. bankruptcy judge overseeing the Voyager case has chastised the SEC for its reasoning.
- The regulatory bodies are investigating the deal to determine if it will involve foreign investment and raise national security concerns.
The United States judge overseeing Voyager Digital’s bankruptcy case has chastised the Securities and Exchange Commission (SEC) for its ambiguous reasoning for objecting to the crypto lending firm’s proposed sale to Binance.US. The details have been shared in a report published by Reuters.
At a court hearing in New York on 2 March, U.S. bankruptcy judge Michael Wiles stated that the SEC had basically asked to stop everyone in their tracks without clarifying how it would address its concerns about the deal.
The court was considering a restructuring plan announced in December last year to bring Voyager out of Chapter 11 bankruptcy, under which crypto exchange Binance.US would acquire its assets for $1.02 billion. Voyager mentioned that this was the highest bid for its assets so far.
Regulatory bodies probing the deal that has popular support
The deal requires the approval of not only the court but also of the SEC and the Committee on Foreign Investment in the United States (CFIUS).
The regulatory bodies are investigating the deal to determine if it will involve foreign investment and raise national security concerns.
Customers of Voyager would be transferred to Binance.US under the proposed plan. Customers would be able to withdraw funds for the first time since the platform declared bankruptcy last July.
Furthermore, customers are expected to recover more than 70% of their deposited value at the time of the bankruptcy.
The plan was supported by 97% of Voyager’s customers in a poll of 61,300 account holders with claims against the crypto lender.
The SEC, on the other hand, filed an objection to the sale last week, claiming that aspects of the restructuring plan could violate securities laws.
The regulatory body specifically pointed towards the crypto transactions required to rebalance funds for redistribution to Voyager account holders.
When asked if the SEC believes the plan violated the law, SEC attorney William Uptegrove replied to Judge Wiles, “The SEC is a deliberative body, and its process is a non-public one by federal law.”
The judge stated that if there are grounds for concern, the SEC must provide specific details to the court.
