Even if Wiles confirms the plan, the sale, which Voyager values at $1.3 billion based on current crypto prices, cannot close until it gets final approval from the SEC and the Committee on Foreign Investment in the United States (CFIUS), which has also raised doubts about the deal.
The SEC, which has objected to the sale, is currently investigating whether Voyager's crypto lending business involved the sale of unregistered securities. It has raised concerns in court filings that Voyager cannot prove that the Binance deal or any other crypto transaction complies with U.S. securities law. When pressed by Wiles as to whether the SEC believed that the Voyager sale violated U.S. securities laws, SEC attorney William Uptegrove did not have a definite answer.
"We can't take a position at this point," Uptegrove said. "The SEC is a deliberative body, and it's process is a nonpublic one by federal law." Wiles was not satisfied with that response.
"Deliberative is one thing, but what have you done?" Wiles asked. "If there are reasons to be concerned here, I need to hear specifics." Wiles is expected to rule on whether Voyager's bankruptcy plan should be confirmed later on Thursday. The Binance transaction includes a $20 million cash payment and an agreement to transfer Voyager's customers to Binance.US's crypto exchange. The crypto assets deposited by Voyager customers account for the bulk of the deal's valuation, according court documents.
Once Voyager's customers have Binance.US accounts in place, they will be able to make withdrawals for the first time since Voyager froze their accounts last summer. Voyager filed for bankruptcy in July, months after the crash of major crypto tokens TerraUSD and Luna sent shockwaves across the digital asset industry.
It estimates the sale will allow customers to recover 73% of
the value of their deposits at the time of Voyager's bankruptcy
filing, the company's attorney Christine Okike said at
Thursday's hearing.
CFIUS did not formally object to the Binance sale, but it
warned that its ongoing review of national security concerns
could end up blocking the deal.
Binance.US has said that it is "fully independent" of its
international parent company Binance, which is owned by
Chinese-born and Singapore-based Changpeng Zhao.
(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and
Bill Berkrot)
