A deal valued at over US$1 billion between Binance.US and bankrupt crypto lender Voyager should be put on hold while key legal objections are worked out, the U.S. Department of Justice (DOJ) said in a filing on Tuesday.

See related article: Voyager gains court approval to sell assets to Binance U.S. in US$1.3 bln deal

Fast facts

  • The DOJ’s statement followed an appeal by the U.S. Trustee, a branch of the Department of Justice responsible for bankruptcy cases, which has concerns the deal would absolve Voyager and its staff from breaches of tax or securities law.
  • In January, the U.S. Securities and Exchange Commission (SEC) objected to the deal, saying that it was investigating Voyager for breaking securities laws and that the purchase agreement lacked details on Binance’s ability to close the deal and its planned business operations.
  • However, showing skepticism of the arguments made by the SEC, a New York bankruptcy judge approved the deal that would see Binance.US pay US$20 million for approximately US$1.3 billion worth of digital assets held by Voyager.
  • In the latest filing in opposition to the deal, U.S. Attorney Damian Williams said, “the Court cannot tell the government to speak now or forever hold its peace before Voyager and Binance.US wed,” adding that “nothing in the Bankruptcy Code permits courts to exculpate parties from liability to the government for past and future conduct.”
  • Williams concluded that approval of the deal should be put on hold, especially parts that limit the government’s ability to hold Voyager legally liable, until appeals are dealt with in higher courts. 
  • If approved, the Binance.US deal could see Voyager clients made whole after being unable to recover their assets after the platform filed for Chapter 11 bankruptcy in July. 

See related article: SEC objects to Binance’s US$1 bln deal to buy Voyager Digital’s assets