The SEC has been the driving force behind a recent spate of investigations into the crypto industry and a push for strict regulation to prevent further meltdowns.
While the Commission’s caution is fully justified, certain entities believe that the US regulator is dragging a far too wide net — including, in this case, a federal judge.
Billion dollar deal approved
In an unexpected twist, Voyager Digital has received court approval to proceed with their deal with Binance US, according to Bloomberg. The deal would allow Voyager’s investors to recoup between 50-73% of their holdings, depending on the outcome of Alameda’s lawsuit against Voyager – and the recent appreciation of crypto assets almost across the board.
Currently, Voyager’s creditors can earn about $100 million more if the deal goes through, as opposed to liquidation. Should the deal with Binance US go through, creditors would have to request a refund through the Binance US platform.
Voyager set aside $445 million to pay Alameda in case the court ordered the company to return the money borrowed and subsequently repaid by Alameda.
SEC criticized by federal judge
As motivation for his decision to approve the sale, U.S. Bankruptcy Judge Michael Wiles expressed his frustration with the SEC and DOJ, stating that even they seem uncertain in the current case whether the sale would cause legal trouble.
“I can’t freeze the whole thing indefinitely while regulators sort out if they think there are any issues with the transaction and the plan.”
As a result, Judge Wiles confirmed he would approve the plan, following some minor wording changes to the deal.
Peter M. Aronoff, a DOJ attorney, said he and his colleagues are considering appealing the judge’s decision.
It is worth noting that the somewhat exaggerated attitude of US regulators is somehow justified. After all, the law works as a precedent, and they fear that if the current deal is approved, it could serve to legitimize further deals of this kind in the future, regardless of whether the parties involved are genuine or not.
On the other hand, Judge Wiles noted that it would be impossible to resolve bankruptcy cases if those involved could sue at will, even if the resolution to the case had already been approved by the judge.
It is now up to Voyager to decide what action to take.
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