Voyager must now choose between finishing the deal and going completely out of business. What do you think will happen?
In an effort to stop additional market collapses, the SEC has been the driving factor behind a recent wave of inquiries into the cryptocurrency sector.
Although the Commission's caution is unquestionably justified, other organizations, including, in this case, a federal court, think that the U.S. regulator is casting a far wider net.
According to Bloomberg, Voyager Digital has gotten the court's blessing to proceed with its agreement with Binance US, which is an unexpected turn of events. Depending on the outcome of Alameda's lawsuit against Voyager and the recent rise in the value of crypto assets almost everywhere, the arrangement would allow Voyager's investors to recover between 50 and 73% of their holdings.
Creditors of Voyager now stand to collect around $100 million more from the sale than via liquidation. Creditors would have to use the Binance US platform to submit a refund request should the agreement with Binance US go through.
In the event that Voyager is required by a court to return the money that Alameda borrowed and later paid back, the firm has set aside $445 million to compensate Alameda.
US Bankruptcy Judge Michael Wiles highlighted his frustration with the SEC and the DOJ as the reason for his decision to authorize the transaction, claiming that, in the present situation, even they were uncertain as to whether the sale will result in legal complications.
“I cannot put the entire case into an indeterminate deep freeze while regulators figure out whether they believe there are problems with the transaction and plan.”
After making a number of minor wording adjustments to the agreement, Judge Wiles subsequently stated that he would approve the proposal.
According to Peter M. Aronoff, a lawyer for the DOJ, an appeal of the judge's judgment is being discussed.
It's important to note that American regulators' sometimes excessive zeal may be justified. They worry that if the current arrangement is accepted, it may serve to legitimate future deals of similar nature regardless of whether the parties involved are sincere or not. After all, the law operates in precedent.
On the other hand, Judge Wiles remarked that if individuals concerned could sue at will, even if the judge had already accepted the case's settlement, it would be impossible to resolve any bankruptcy cases. Voyager must choose their next line of action at this point.
Let us see how this deal closing affects future crypto regulation.
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