Court grants Voyager initial approval for $1 billion Binance deal

The deal, which would see users of the now-bankrupt Voyager get about half of their assets back, still needs to pass a court hearing to become final.

First approval is in

Crypto broker Voyager has received first court approval to sell some of its assets to Binance.US. The amount of this deal is worth approximately $1 billion.

US Bankruptcy Judge Michael Wiles in New York previously cleared Voyager to enter into an asset purchase agreement with the popular crypto exchange. A vote was also allowed among creditors on the sale, according to the court filing.

However, the deal will not be final until a court hearing is held on March 2 or shortly thereafter. If the deal goes through, Voyager customers will reportedly get back 51% of their capital. Since July of 2022, the customers have already lost access to their funds that were on the Voyager platform.

Voyager filed for bankruptcy in July of 2022 due to the crypto winter and associated market conditions. Exposure to the now collapsed Terra was also one of the causes.

A little later, the crypto exchange FTX won the bid to buy the company’s remaining assets. The win came before FTX itself went into high-profile bankruptcy. After the collapse of the FTX exchange, Voyager’s lawyers said at a hearing that there would be no more transaction with FTX due to their bankruptcy. In December of last year, Binance.US emerged as the eventual winner of the bid.

Voyager, Binance.US and Alameda Research

The news comes as the planned acquisition drew criticism from both the SEC and Alameda Research. In a document posted last week, Alameda launched into several critiques. The $1 billion takeover deal was said to “ignore the fundamental requirements and protections of bankruptcy law.”

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Voyager’s filing in response accused Alameda of “hypocrisy and chutzpah at its finest.” The SEC also questioned Binance’s ability to “execute a transaction of this size”. The institution expressed concern “about how the debtors intend to secure clients’ assets”.

It’s not just financial concerns that may be slowing sales. The US Committee on Foreign Investment in the United States (or CFIUS for short), a public entity that reviews and regulates foreign investment in the US, posted a list of questions about the deal in December. The deal could be potentially dangerous to US national security. Should that be the case, the court has the right to block the deal.

Voyager attorney Joshua Sussberg said in a separate filing that it was working to address any issues raised by the CFIUS. Sussberg claimed that if the CFIUS blocks the Binance deal, it will result in a lower payout for Voyager’s users. This in turn will be bad for these users. However, it is not yet known whether the deal will actually be blocked at a later date, but this is not expected to happen. The initial approval has now been issued.

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