Binance-Voyager deal gets initial court approval despite SEC objections

The U.S. bankruptcy court for the Southern District of New York provided an initial greenlight for the Binance-Voyager deal on Jan. 10, Reuters reported.

Judge Michael Wiles approved the disclosure statements that explained the various aspects of the deal.

However, Judge Wiles asked the attorneys working on the deal to revise the proposed order before he gives final approval. The deal will be finalized at a future court hearing. Until then, the judge asked Voyager to seek the votes of all its creditors on the sale of its $1 billion assets to Binance.

Voyager is responding to the concerns raised by the U.S. Committee on Foreign Investment in the United States (CFIUS), Voyager counsel Joshua Sussberg told the court. CFIUS scrutinizes foreign investments in U.S. firms to determine national security risks.

As part of the proposed deal, Voyager will receive $20 million in cash from Binance and will transfer user accounts to the Binance.US crypto exchange. This would enable Voyager customers to withdraw 51% of their deposits at the time of the bankruptcy declaration, Sussberg said.

He added that if CFIUS blocks the deal, the lender will have to repay customers with its crypto assets at hand. This would result in lower payouts for Voyager users, Reuters reported.

The Securities and Exchange Commission (SEC), New Jersey regulators had previously filed objections against the Voyager-Binance deal. However, the judge allowed the deal to proceed despite the objections. The judge said that the regulators will be allowed to object to the final approval of the deal in the future, Reuters reported.

Voyager had filed for bankruptcy in July, soon after the implosion of Terra-Luna and the bankruptcy of Three Arrows Capital. Voyager was initially supposed to sell its assets to FTX but the deal fell apart when the exchange declared bankruptcy.