Binance US’s plan to acquire some of Voyager Digital’s assets for $1.02 billion is a step closer as the bankrupt crypto lender has received initial court approval for its proposal.
On January 10, U.S. District Judge Michael Wiles of the Southern District of New York Bankruptcy Court approved Voyager to enter into a purchase agreement with the crypto exchange and seek creditor votes on the sale.
According to the Reuters report, the agreement will only become final at an upcoming court hearing. Additionally, the confirmation hearing is scheduled for March and will also require approval from Voyager’s creditors. If successful, the sale will help Voyager customers recover 51% of the crypto assets held prior to filing for bankruptcy.
But federal prosecutors are suing Binance, not least because of its proximity to now-defunct rival FTX. As a result, Voyager is seeking to expedite the national security review of the deal which could decide whether it can be implemented.
During Tuesday’s hearing, Voyager attorney Joshua Sussberg confirmed that the lender was actively responding to national security concerns raised by the Committee on Foreign Investment in the United States (CFIUS).
The agency essentially examines the national security implications of foreign investments in US-based companies or operations. Sussberg also asserted that Voyager will address any concerns CFIUS may deem valid by opposing the transaction with Binance US.
“We are coordinating with Binance and their attorneys to not only process this request, but to voluntarily submit a request to move this process forward.”
As part of the deal, Voyager will receive a cash payment of $20 million and transfer customers to the Binance US crypto exchange. Thus, this will allow clients to withdraw their crypto assets from the platform for the first time after bankruptcy.
If CFIUS blocks the transaction, Voyager will have to reimburse its customers with the available crypto-assets, in which case the customers will end up receiving fewer payments.
The latest development comes a week after the U.S. Securities and Exchange Commission (SEC) reportedly opposite Binance US proposal to buy Voyager assets. The SEC’s argument centered on the fact that the crypto exchange has not sufficiently demonstrated that it has the necessary funds to settle the deal. The SEC added that Binance US also failed to explain how it plans to secure the assets of Voyager customers.
Despite the denial, Justice Glenn gave the green light to the deal despite the fact that the Commission will have the opportunity to object to the deal receiving final approval in the future.