Voyager nears deal to move crypto accounts to Binance.US
Summary
- Bankruptcy judge overrules state objections to the deal
Bankrupt crypto firm Voyager Digital Ltd. received preliminary court approval to sell its customer accounts to Binance.US, a proposal that had drawn objections from state and federal regulators.
Voyager will seek customers’ vote in support of the deal, and will return for final approval from the bankruptcy court, Judge Michael Wiles of the U.S. Bankruptcy Court in New York ruled on Tuesday.
Voyager, which filed for bankruptcy last year, is seeking to enter a deal with Binance.US, the Palo Alto-based crypto platform owned by Changpeng Zhao, who also owns Binance.com, the biggest crypto exchange by volume. Voyager sought the deal with Binance after a similar transaction with FTX fell through when that crypto exchange collapsed.
The deal is valued at $1.022 billion and provides for a transfer of customers’ digital coins worth just over $1 billion to Binance.US. Most customers will have the ability to trade or withdraw their crypto on the Binance.US platform within days after the transaction is consummated.
At the hearing on Tuesday, Judge Wiles overruled a number of states that objected to the sale, questioning the buyer’s financial health and jurisdictional aspects of the deal.
Under Voyager’s proposed sale and restructuring plan, customers can also opt to get their funds back in government-issued currency rather than moving their crypto assets to Binance.US.
State regulators who objected to the deal, including Texas, New York and Vermont, would have another opportunity to make their case against the deal when Voyager’s plan comes up for trial at a confirmation hearing, Judge Wiles said.
Regulators from Texas say the opaque finances of Binance.US, Binance.com and their owner Mr. Zhao raise red flags, and that they might not be able to protect customers because those entities are registered in foreign jurisdictions.
He ruled that differences in the way customers from different states are treated don’t amount to discrimination of creditors under the chapter 11 code, and allowed Voyager to move ahead with the next steps in completing the sale.
“With respect to the Binance transaction we certainly had concerns," said Darren Azman, a lawyer for the committee of customers in the case. “The main concern is that we didn’t have a repeat of what happened with the FTX transaction."
The deal, however, is structured to safeguard customers’ funds, while the transfer to Binance.US occurs, and that would allow those customers in most states to have access to their digital assets within days after the transfer out of Voyager’s platform, Mr. Azman said.
This story has been published from a wire agency feed without modifications to the text
