US Department of Justice Court of Appeals Decision Approving $1,300,000,000 Voyager Acquisition
The US Department of Justice (DOJ) is appealing a recent court ruling that approved Binance.US’ acquisition of crypto lender Voyager Digital.
In a new court case, the DOJ is appealing New York Judge Michael Wiles’ decision to allow Voyager to sell assets worth $1.3 billion to Binance.US, the US arm of the world’s largest crypto exchange platform by volume.
The deal also included a $20 million payout to customers of Voyager, which went bankrupt last year after troubled crypto firm Three Arrows Capital (3AC) failed to repay a loan worth hundreds of millions of dollars.
Earlier this week, Judge Wiles rejected the US Securities and Exchange Commission’s (SEC) argument that the deal between the two companies should be stopped because it could potentially violate securities laws.
According to the SEC, reallocation of firm funds to account holders may be a violation of the Securities Act of 1933.
“Here, the transactions in cryptoassets necessary to effect the rebalancing, the redistribution of such assets to account holders, may violate the prohibition of Section 5 of the Securities Act of 1933 against the unregistered offer, sale or delivery after the sale of securities.”
However, Judge Wiles said he does not believe this is a valid reason for the deal to be put on hold.
“I cannot put in the whole case [an] indefinite freeze while regulators determine whether they believe there are problems with the transaction and the plan.”
If the deal breaks down or is stymied by regulators, Voyager can still choose to wind up on its own to repay customers. However, Voyager’s lead investment banker Brian Tichenor says the deal with Binance.US would give clients about $100 million more, according to previous reports.
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