- The regulators claim the deal could amount to a sale of unregistered securities.
- The decision comes amid a lawsuit by the CFTC against Binance and CEO CZ.
Bankrupt cryptocurrency lending platform Voyager Digital may have to wait longer before selling its assets to Binance.US after a federal judge halted the $1.3 billion deal following an appeal by the regulators.
The US Department of Justice (DOJ), the Office of the US Trustee, and the Southern District of New York Attorney’s office objected to the sale at the beginning of the month over concerns that the transaction could amount to an illegal sale of securities under the SEC regulations.
“Upon consideration of all parties’ written submissions, as well as the conferences and oral argument held in this matter, the government’s emergency motion is hereby granted. An opinion setting forth the reasons for this ruling will be issued shortly,” District Judge Jennifer Rearden said on Monday, according to a report by Bloomberg.
See Related: FTX’s Former Executives Subpoenaed By Voyager Creditors To Explain Failed Bailout Attempts
Overruling Bankruptcy Judge Wiles’ Decision
At the beginning of the month, the bankruptcy presiding Judge Michael Wiles green-lit the sale against objections by the SEC, saying that his responsibility was to ensure that the creditors were paid promptly. Binance.US could pay $20 million in cash to Voyager and assume the assets and deposits of the lender.
The decision coincided with a lawsuit against Binance.US’s parent company by the Commodities Futures Trading Commission (CFTC) for alleged illegal trading of crypto derivatives. The suit, filed before a federal court in Chicago, also charged CEO Changpeng Zhao and Binance’s former compliance officer Samuel Liam.
See Related: CFTC Investigates Binance Over Insider Trading Allegations
Voyager Digital filed for bankruptcy last July, months after the collapse of Terra LUNA and stablecoin UST sent shockwaves in the crypto space. The company went down with more than 100,000 creditors; FTX’s Alameda Research is owed $75 million.
See Related: The ‘Terra’ble Fate Of $UST And Its Sister Coin, $LUNA
