On March 27, a federal judge temporarily halted bankrupt crypto lender Voyager Digital from completing a proposed $1.3 billion sale to Binance.US.
The U.S. government had requested more time to explore the legality of the proposed takeover, prompting the response from judge Jennifer Rearden.
According to reports, the U.S. Attorney’s Office for the Southern District of New York and the Office of the U.S. Trustee, the Department of Justice’s bankruptcy watchdog, filed appeals in March over the approval of the sale.
A Blow to Voyager Customers
The concerns aired were that the sale could involve unregistered securities and violation of U.S. securities law.
The judge overruled Voyager’s argument that further delays could cause Binance.US to back out of the deal entirely. This comes alongside the CFTC lawsuit slapped on Binance on March 27.
In mid-March, a judge denied the DoJ’s request for a further delay stating that it could harm the interests of Voyager customers.
Last week, Voyager stated in court filings that the DoJ appeals should not be allowed to keep the company and its customers “in limbo.”
Binance.US agreed to pay $20 million in cash to the embattled crypto lender and take on customer crypto assets valued at around $1.3 billion in February.
The latest setback is a blow to those seeking compensation following Voyager’s bankruptcy filing in July.
Furthermore, Binance CEO Changpeng Zhao has had the book thrown at him by the CFTC. The regulator alleged that Binance conducted in-house trading, manipulated markets, evaded KYC controls, and concealed details of American customers.
Crypto markets have taken a beating following the news of the latest regulatory crackdown by Uncle Sam. Total market cap has tanked by 2.8% on the day to $1.17 trillion at the time of writing, according to CoinGecko.
The Binance native token BNB has lost 5.8% in a fall to $309 at the time of writing. The asset hit a 2023 high of $349 on March 18 but has fallen back almost 8% over the past week as company woes deepen.
Bitcoin had dropped below $27,000 following a 3.4% slide, and Ethereum had lost 2.5% in a fall to $1,720.