A court order approving the bankruptcy plan of Voyager Digital has been appealed by the US Department of Justice (DOJ).
This has created a new obstacle in the plans of the crypto brokerage of selling its assets to Binance.US and transferring its customers to the platform via a deal worth $1.3 billion.
The Appeal
Late on Thursday, a notice of appeal was filed in the US bankruptcy court in Manhattan by the bankruptcy watchdog of the Department of Justice, the Office of the US Trustee, and the Southern District of New York’s US Attorney’s Office.
However, they did not provide details about the reason for their appeal. Bankruptcy Judge Michael Wiles oversees the Chapter 11 bankruptcy process of Voyager Digital.
On Tuesday, the judge approved the restructuring plan at a hearing, which involves the acquisition of the crypto broker’s assets, despite the objections of the DOJ and the US Securities and Exchange Commission.
The Issues
During hearings, lawyers of the US Attorney’s and US Trustee’s Office had spoken up about Voyager Digital’s bankruptcy plan for opposing the included provisions.
They aimed to prevent legal claims for protecting employees due to actions during the bankruptcy.
According to the attorneys, the order that approved the plan was too broad, and it would prevent the government from filing criminal charges or enforcing regulatory actions if they later discovered any misconduct.
The judge disagreed and said that since the court had approved the sale to Binance.US, it would not be fair to penalize Voyager Digital or its employees.
Overruling
Wiles said that if any evidence of misconduct was discovered by a government agency or the DOJ related to the bankruptcy, it should be presented in court.
The SEC’s objection against the plan had also been overruled, as the agency had questioned the sale’s legality but could not present any evidence of securities laws violation.
The deal involved Binance.US taking over the crypto assets of Voyager Digital’s customers and paying cash to the bankrupt company of about $20 million.
