The United States District Court for the Southern District of New York rejected the US government’s reasoning to stop the acquisition of bankrupt brokerage firm Voyager Digital by Binance.US. According to Judge Michael Wiles, any prolongation of the settlement decision will harm the interests of former Voyager clients, who are waiting for their funds to be returned.
The decision to deny the government’s motion arrive March 15th. In it, Wiles alleges his pre-approval of Voyager Digital’s Chapter 11 bankruptcy plan, which suggests selling billions of dollars in assets to Binance.US in an effort to regain liquidity to pay clients.
Thus, the court denied the resource from the government to have the confirmation order suspended, which means an additional delay of two weeks in the completion of the bankruptcy plan. The appeal, filed on March 14, accused the bankruptcy plan of “immunizing fraud, theft or tax evasion.” It has also called for the removal of the provision that prevents US authorities legally prosecute anyone involved in the sale.
Judge Wiles found these allegations “exaggerated and wrong” and ruled to continue with the bankruptcy plan. However, he confirmed the duration of the current stay, which ends on March 20.
Court approval of Voyager acquisition by Binance.US was granted on March 7. Judge Wiles allowed the trading platform to close the sale with Binance.US and issue redemption tokens to affected Voyager clients. He rejected a number of arguments from the US Securities and Exchange Commission that redistributing funds from Voyager to Binance.US would violate US securities law.
The decision was made after 97% of the 61,300 Voyager account holders showed up in favor of the restructuring plan. According to the latest estimates, Voyager’s creditors are expected to recover approximately 73% of the value of their funds.
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