March 23, 2023

Crypto Broker Voyager Digital’s Bankruptcy Plan Faces SEC Objection

The Securities and Exchange Commission (SEC) has raised objections to crypto broker Voyager Digital’s bankruptcy proceedings, which include selling its distressed assets to Binance US. During a court hearing on Monday, Judge Michael Wiles criticized the SEC’s objection, stating that without certain protections for “persons” involved in the restructuring plan, there would be “a sword hanging over the heads of anybody who’s going to do this transaction.”

Voyager Digital has a pending deal to sell its distressed assets to Binance US, which will then handle returning money to the company’s customers. Judge Wiles was originally set to issue a decision on the plan last week, but has instead given the SEC until tomorrow morning to come up with a more convincing argument against Voyager’s restructuring plan.

In its objection, the SEC wrote that it had “serious concerns” about the proposed sale of Voyager’s assets to Binance US, citing potential conflicts of interest and the lack of transparency in the deal. The SEC also expressed concerns about the potential for customer funds to be lost or misused in the process.

Voyager Digital filed for bankruptcy in May, citing liquidity issues and a decline in trading volume. The company has since been working to restructure its operations and sell off its distressed assets to pay back its customers. The proposed sale to Binance US is a key part of this plan, but the SEC’s objections could delay or derail the process.

The outcome of tomorrow’s hearing will be closely watched by the crypto industry, as it could set a precedent for how bankrupt crypto companies are allowed to restructure and sell off their assets.

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