Last Updated on March 8, 2023 by Bitfinsider

After a four-day marathon hearing that spanned last week and this week, a federal judge affirmed that the Binance.US can purchase the assets of failed cryptocurrency lender Voyager Digital.

Voyager’s amended restructuring plan, which incorporates the $1 billion agreement with Binance.US, was approved by Judge Michael Wiles on Tuesday.

The plan met objections from the Securities and Exchange Commission, other regulators and some individual creditors who voiced issues about Binance.

US. Wiles admitted the issues, but he claimed he had not seen concrete proof that indicated Binance.US must be rejected.

“I am in the absolutely unenviable position of having to make a ruling about the proposed transaction in the face of hearsay accusations of potential wrongdoing in an industry where other firms have apparently engaged in real wrongdoing,” Wiles stated. He added: “I have been given no evidence that Binance.US will misuse customer assets, or that it cannot be trusted.”

He noted that the final restructuring plan’s modifications, such as alterations to an exculpation provision for parties who carry out the transaction and clarifications regarding how Binance.US will manage customer data, are subject to the judge’s approval.

A business representative referred to the SEC lawyer’s accusations as “regrettable” but praised the Wiles for approving the sale.

“Our goal has always been to return customers their cryptocurrency on the fastest timeline possible and empower users to make their own decisions about their own assets. We look forward to completing the transaction and welcoming Voyager customers to Binance.US where they can expect the highest levels of service and support,” said the spokesperson from Binance.US in an email.

The plan, which the interagency Committee on Foreign Investment in the United States could still scuttle, contains a “toggle” option that would let Voyager liquidate assets on its own if the sale doesn’t work out. The transaction between Binance.US and Voyager may be subject to review, according to court documents from CFIUS, which has the authority to reject foreign acquisitions of American businesses.

Wiles recognized the uniqueness of the insolvency case and the evolving regulatory landscape when he issued his decision.

“The future regulatory environment can only be characterized as uncertain, in my mind, virtually unknowable,” Wiles said of the present regulatory environment, which can only be described as uncertain. He also nodded at other defunct cryptocurrency businesses, such as FTX, which attempted to acquire Voyager’s properties before declaring bankruptcy last year.

97% of the 6% of creditors who cast ballots in support of the proposed Voyager plan did so. Customers could receive a 73% recovery under the plan, according to Voyager’s attorneys; however, if successful claims from the bankrupt crypto exchange FTX and its sibling business Alameda Research are made, that percentage would decrease to 48%. The Binance.US website has already attracted more than 167,000 users.

Throughout the meeting, Wiles fought with several governmental organizations. He chastised the SEC for informing the court that Binance is believed by its employees. US is running an unregistered securities exchange in the United States, but it has not declared an official stance or offered any proof.

Wiles also had harsh words for the attorney for the Southern District of New York’s U.S. Attorney’s Office, who opposed to granting a criminal defense to those who carry out certain aspects of the Voyager plan.

J.D. Barnea, the co-chief of the office’s tax and bankruptcy unit, said it was inappropriate for a bankruptcy judge to enjoin criminal prosecution for anyone. In response, Wiles referred to Barnea’s proposal as “preposterous,” asserting that the attorney’s office had not offered any proof that any aspect of the deal was unlawful.

“The very suggestion offends me to no end. I can’t believe you would even take the position in front of me,” Wiles said. He also added: “People who have to do what my order will compel them to do are entitled to know, okay? And they’re entitled to clarity.” 

After hearing testimony for more than 20 hours during a protracted hearing in the U.S. Bankruptcy Court for the Southern District of New York, Wiles made a judgment regarding the restructuring plan. For the “unusual amount of work and energy that they have put into following this case,” the judge thanked the creditors.

Since July 2022, this bankruptcy case has been ongoing. Customers and creditors deserve a resolution to this issue because they have been refused access to their assets for many months, according to Wiles.