The US Department of Justice has expressed concerns about Binance.US’ acquisition deal with Voyager, calling for a hold on the transaction until legal challenges are resolved due to worries that the deal would clear Voyager and its employees of any violations of tax or securities law.
In a filing on March 28th, the DOJ expressed concern that the proposed transaction would absolve Voyager and its employees of any violations of tax or securities law, prompting the US Trustee to call for a hold on the deal until legal issues are resolved.
US Attorney Damian Williams reiterated this position, saying that “nothing in the Bankruptcy Code permits courts to exculpate parties from liability to the government for past and future conduct.”
Attorney Williams argued in the latest filing that the acquisition deal should not proceed, at least until higher courts have dealt with the appeals process. Specifically, Williams called for the parts of the deal that limit the government’s ability to hold Voyager legally liable to be put on hold until legal issues have been resolved.
A refresher of the concerns raised about the acquisition deal
The Securities and Exchange Commission (SEC) has expressed concerns about the acquisition deal, saying it was investigating Voyager for possible violations of securities laws and that the purchase agreement lacked information necessary to evaluate Binance’s ability to close the deal and its planned business operations. However, despite these concerns, a New York bankruptcy judge approved the deal in January, allowing it to move forward.
The New York Department of Financial Services (NYDFS) and Letitia James, the state’s attorney general, have also objected to the deal, claiming that Voyager was serving customers in the state illegally. They have raised concerns about the timeline for customer repayment, particularly as Binance.US seeks approval in New York, where customers may have to wait six months to retrieve their assets.
Final Thoughts
The acquisition deal has been closely watched by the crypto community, as it could see Voyager’s clients receive compensation for their losses after being unable to recover their assets when the platform filed for Chapter 11 bankruptcy. However, the DOJ and SEC’s concerns about the transaction have cast doubt on its viability, and the hold on the deal means that its ultimate outcome remains uncertain.
While the acquisition deal’s ultimate fate is still up in the air, the legal challenges it has faced demonstrate the growing regulatory scrutiny of the cryptocurrency industry. As cryptocurrencies continue to gain mainstream acceptance, governments and regulatory bodies around the world are increasingly seeking to impose regulations and oversight. The fate of the Binance.US-Voyager acquisition deal may serve as a bellwether for the future of the cryptocurrency industry, as it navigates the complex and evolving legal landscape.