The recent New York South District Court pronouncement directed Voyager Digital to pause the acquisition process by Binance.US. Judge Jeniffer Rearden granted the emergency stay order sought by the US government.
Emergency Stay Order Set to Delay Voyager Digital’s Acquisition
The pronouncement issued by the court added another twist to the Voyager Digital acquisition by Binance.US in a $1.3 billion deal. It reignited the endless battle before the court, where federal regulators petitioned the court to suspend the proposed sale following the dismissal of its temporary objection.
Contrary to the earlier dismissal of the temporary objection, the bankruptcy judge indicated that parties involved in the sale should allow the aggrieved parties (government and regulators) to exhaust the appeal process outlined in the US court system.
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Halt Acquisition Till Parties Exhaust Appeal in the Court System
In her ruling, the bankruptcy judge observed that the assessment of the written submissions by all parties, alongside the oral arguments, supported the issuance of emergency stay orders. In summary, the ruling delivered by Judge Rearden directed that parties would access the detailed reasons informing the decision to grant the motion.
The ruling reverses the initial approval order granted by bankruptcy Judge Michael Wiles in early March. The judge dismissed the objection submitted by the Securities and Exchange Commission alongside the US Trustee’s office. Notably, Judge Wiles of the New York Southern Bankruptcy Court observed that the regulators failed to put up a convincing case to pause the case.
Judge Wiles dismissed the claims as failing to persuade reasons why he ought to delay creditors of the embattled crypto lender from receiving their digital wealth back. Instead, he restated his mandate as expediting the bankruptcy process for the creditors to recoup their money. Creditors had already suffered prolonged delays since the crypto lender filed for bankruptcy in July 2022.
The recent ruling to grant the emergency stay deserts the position Wiles portrayed by pushing back the efforts to halt the deal twice.
Binance Exchange and Affiliate Days in Court
Meanwhile, the order issued on Monday evening coincided with the Commodity Futures Trading Commission (CFTC) confirming suing Binance global exchange before the Illinois North District court.
The stay order would obviously delay the acquisition of the Voyager Digital Assets by Binance.US at a time when the Binance global exchange is embroiled in a court battle with CFTC. It marks an exciting twist, mainly when Binance.US, affiliated with the Changpeng Zhao-led Binance, often asserts autonomy.
CFTC lawsuit alleges Binance and Changpeng Zhao pursued commercial success of the exchange rather than devoting themselves to complying with the applicable Commodities Exchange Act and Foreign Controlled Company legislations.