The SEC has been the driving force behind a recent spree of investigations into the crypto industry and a push for hard-hitting regulation to prevent further meltdowns.
Although the Commission’s caution is definitely warranted, certain entities believe that the U.S. regulator is casting far too wide of a dragnet – including, in this case, a federal judge.
In an unexpected turn of events, Voyager Digital has received the court’s approval to go through with their deal with Binance US, according to Bloomberg. The deal would allow Voyager’s investors to recoup between 50-73% of their holdings, contingent on the outcome of Alameda’s lawsuit against Voyager – and the recent appreciation in the value of crypto assets nearly across the board.
Currently, Voyager creditors stand to gain about $100 million more if the deal goes through as opposed to liquidation. Should the deal with Binance US be carried out, creditors would have to apply for a refund via Binance US’ platform.
Voyager has reserved $445 million to pay Alameda in case the courts order the company to give back the funds borrowed and then repaid by Alameda.
Motivating his decision to approve the sale, US Bankruptcy Judge Michael Wiles expressed frustration with the SEC and the DOJ, stating that, in the current case, even they seem unsure of whether the sale would create legal issues.
“I cannot put the entire case into indeterminate deep freeze while regulators figure out whether they believe there are problems with the transaction and plan.”
As a result, Judge Wiles confirmed that he would approve the plan, following several minute wording changes to the deal.
Peter M. Aronoff, a lawyer for the DOJ, mentioned that he and his colleagues are considering an appeal against the judge’s decision.
It’s worth noting that the somewhat overeager demeanor of U.S. regulators is somehow warranted. After all, the law works in precedent, and they fear that if the current deal is approved, it may serve to legitimize further deals of this sort down the road, regardless of whether the parties involved are genuine or not.
On the other hand, Judge Wiles commented that it would be impossible to solve any bankruptcy cases if those involved could sue at will, even if the resolution to the case was already approved by the judge.
It is now up to Voyager to decide which course of action they will take.