Binance.US can move forward with plan to acquire Voyager Digital assets, under judge’s rules

Binance.US has passed a major hurdle in its effort to acquire the assets of bankrupt crypto lender Voyager Digital in a deal worth more than $1 billion after Michael Wiles, a judge in bankruptcy of the Southern District of New York, dismissed the various objections to the proposed acquisition. .

Although the judge said he would still work on the confirmation order, he indicated he was in favor of approving the deal. Binance.US may still need to overcome some regulatory hurdles before the deal can be finalized. Voyager’s VGX token jumped over 8% within minutes of the decision.

The plan, assembled after previous bidder FTX itself filed for bankruptcy protection in November, had been backed by 97% of Voyager’s creditors who responded to the proposal, which could see them recover nearly three quarters of their assets.

The lengthy hearing began with good news for creditors, with Voyager’s lawyers saying creditors could potentially recover 73% – with a bullish crypto market raising a previous estimate of 51%.

However, regulators in Texas and New Jersey have warned that those benefits could be significantly dampened if FTX’s Alameda Research succeeds in recovering $445 million in loan repayments made before its own November filing for bankruptcy.

During the fourth day of hearing on Tuesday, Judge Wiles ultimately ruled that these regulators’ objections did not outweigh the need to restructure Voyager.

The court heard from a series of witnesses on complex topics such as whether personal data would be transferred to Binance.US as part of the agreement, and why the transfer was a better deal for creditors than a transfer. immediate liquidation.

Creditors questioned Voyager’s financial advisors on things like how to deal with more exotic types of crypto assets and how to deal with clients in states including New York, Texas, Vermont and Hawaii, where regulators won’t let Binance.US operate.

The hearing, which began on Thursday, also gave various parties and regulators an opportunity to object to the proposed sale. The judge ultimately ruled that many of these objections did not make a strong case or would have unnecessarily bogged down the proceedings.

“If the government wants to argue that ‘Voyager’s sale of VGX tokens was a securities offering, it should have done so,’ he said, referring to an SEC attorney’s statement that the sale proposed may relate to securities law. However, regulators have not chosen to do so; based on the evidence given at the hearing, Wiles would have had “no choice” but to declare that the transactions were perfectly legal, he added.

Other concerns raised by the parties included the possibility that Voyager customer data, including social security numbers, could be shared with Binance.US and could be stored in offshore databases. An attorney representing Binance.US said that no Binance.US employee would have access to this type of information.

Jamie Crawley contributed reporting.

UPDATE (Mar 7, 2023, 22:10 UTC): Adds a VGX token surge.

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