Voyager-Binance.US Legal Fight Must Be Resolved by April 13, Court Documents Say

Voyager Digital's creditors stand to lose $100 million if delays caused by government objections to Binance.US' deal to buy Voyager drag on.

AccessTimeIconApr 4, 2023 at 8:40 a.m. UTC
Updated Apr 6, 2023 at 4:06 p.m. UTC

Voyager Digital and its creditors stand to lose $100 million if legal objections brought by the U.S. government aren't resolved by April 13, according to documents filed in court late Monday night.

The bankrupt crypto lender is taking urgent legal action to let a $1 billion purchase by Binance.US go ahead, fearful that squabbles over the terms of the contract could prompt Binance.US to pull out.

“Consummation of the plan by April 13 is necessary to preserve massive creditor value,” a filing by Voyager’s creditors stated. “The evidence is uncontroverted that, if the deal is not completed, Voyager’s creditors will lose roughly $100 million in value.”

A parallel filing made by Voyager itself, also to the U.S. Court of Appeals for the Second Circuit in New York, said that delays could cost $10 million per month and that more than 1 million Voyager customers wouldn’t be able to access their savings.

Under the terms of the deal, originally signed in December and approved by U.S. Bankruptcy Judge Michael Wiles in March, Binance.US can back out if the agreement isn’t closed within four months.

Lawyers for the U.S. government have protested that the terms of the contract would effectively absolve the company from breaches of tax or securities law, and last week, U.S. District Judge Jennifer Rearden agreed to put the deal on hold while the issue is settled.

In March, the Securities and Exchange Commission sought to argue that assets involved in the transfer such as the Voyager token VGX could constitute unregistered securities, but the agency was rebuffed by Wiles.

Binance.US didn't immediately respond to a request for comment.

Early last month, Binance CEO Changpeng Zhao suggested he could pull out of the deal in view of legal delays, before adding that he still supported the deal to return funds to customers.

Edited by Sandali Handagama.


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Jack Schickler

Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

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