United States officials want to remove a provision included in the plan of bankrupt lender Voyager Digital to sell digital assets to the crypto exchange Binance.US that would prevent them from prosecuting anyone involved in the sale.
In a motion filed on March 14 in New York Bankruptcy Court, US Trustee William Harrington and other government lawyers argued: “the court improperly exceeded its statutory authority” to approve the pardon.
He asked the court’s approval of the sale to be delayed for two weeks so he could file an appeal.
Tomorrow just gets interesting. # Voyager #VGX #Binance # Bankruptcy # DOJ pic.twitter.com/23bqIWpX2M
— VGX Heroes (@VGX_Heroes) March 15, 2023
The provision shields those involved in the sale from liability for its implementation, which the court approved on March 7 after finding that 97% of Voyager customers chose the plan, according to a February 28 filing.
While U.S. officials did not object to other parts of the proposed sale, they said the provision would hinder “the government’s ability to exercise policing and regulatory powers.”
Notice of Expedited Motion to Stay Pending Appeal filed by the US Department of Justice on @investvoyager insolvent
Looks like the exculpation provision (legal protection for certain individuals) is the main thing holding up the dealhttps://t.co/a40FyPcoLa pic.twitter.com/zplip3eJob
— Shingo Lavine (@shingolavine) March 15, 2023
On March 6, the Securities and Exchange Commission (SEC) also objected to the plan, especially the “extraordinary” and “improper” exculpatory provisions, on the grounds that the repayment token would be an unregistered security offering and that Binance.US operates unregulated securities. . exchange.
related: Binance.US, Alameda, Voyager Digital and the SEC – the ongoing court saga
A hearing on the matter will be held on March 15 at 2:00 p.m. local time.
Based on the latest estimates, the plan will result in Voyager’s creditors recouping approximately 73% of their funds.