Binance.US’s plan to acquire the assets of bankrupt crypto lender Voyager has suffered a setback after the US government raised objections.
Damian Williams, a US government attorney, has filed a petition to block Voyager’s acquisition of Binance.US, or at least the eviction provision.
The discharge provision absolves Voyager from any past or future civil or criminal liability to the government. Williams writes, “One can imagine any number of illegal acts occurring during these transactions, from using stolen funds to negligently failing to report relevant taxes.”
Bankruptcy Court Can’t Immunize Voyager: US Government
In the filing, the government’s counsel argues, “As the focus of the Code is the creditor-debtor relationship, it provides no basis for courts to potentially immunize debtors and non-debtors from law enforcement and other actions taken by the government.” Nor can the courts acquit debtors and non-debtors for acts done after a plan has come into force.
Finally, if the bankruptcy court rejects the motion, the government requests two weeks to seek relief from the district court.
Customers can recover 73% of the asset when the deal is closed
Earlier this month, the bankruptcy court approved Voyager Digital to sell its assets to Binance.US. It also rejected the Securities and Exchange Commission’s (SEC) objections that Binance.US was not registered as a securities exchange.
Previously, several others, such as the New York Department of Financial Services (NYDFS) and the New York Attorney General, had opposed the deal.
Binance.US, the US arm of Binance, won the bid to buy $1.022 billion worth of assets of bankrupt crypto lender Voyager. If the deal goes through, Voyager can recover up to 73% of the client assets.
Voyager filed for Chapter 11 bankruptcy in July 2022 after it had exposure to hedge fund Three Arrows Capital.
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BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.