The U.S. District Court of New York rejected the U.S. government’s arguments for stopping the acquisition of bankrupt brokerage firm Voyager Digital by Binance. Judge Michael Wiles stated that any delay in the deal would harm the interests of Voyager’s clients who are still waiting for their funds to be returned.
The judge’s decision to deny the motion was announced yesterday. The decision reveals that Judge Wiles has previously approved Voyager Digital’s bankruptcy plan. A plan that involves selling billions of dollars worth of assets to Binance in order to recover liquidity and pay off the customers who are owed money.
The court rejected the appeal by the government for a stay on the confirmation order, causing an additional delay of 2 weeks in the realization of the plan to sell. The appeal claimed that the bankruptcy plan was essentially “immunized fraud, theft, or tax avoidance.” It also requested the removal of the provision that would prevent United States authorities from legally pursuing those involved with the sale.
Judge Wiles referred to those accusations as “exaggerating and mischaracterizing,” and went on to rule that the bankruptcy plan could continue. However, he did confirm the duration of the stay request, which will end on March 20.
On March 7, the court approved Binances’ purchase of Voyager. Judge Wiles allowed the trading platform to complete the sale, and to provide repayment tokens to the Voyager customers that were impacted by the firm’s failure. The U.S. Securities and Exchange Commission presented a number of arguments to Judge Wiles, arguing that the transmission of funds from Voyager into Binance would be in violation of U.S. securities laws.
The restructuring plan was supported by 97% of the 61,300 Voyager account holders. According to the most recent estimates, Voyager creditors will be able to recover approximately 73% of their funds.