Binance.US’s acquisition of Voyager Digital is on hold until the legal battle with the exchange has been resolved.
Voyager wants the legal fight to be resolved by April 13, as creditors stand to lose $100 million due to the delay.
Binance is facing a lawsuit in the United States after the CFTC accused it of improper compliance procedures and trading.
Voyager wants Binance.US’s legal fight resolved soon
Bankrupt cryptocurrency lending firm Voyager Digital wants the legal fight with Binance.US to be resolved by April 13th, or its creditors stand to lose $100 million. This is according to legal documents filed late Monday night.
Binance.US and Voyager Digital had agreed to a $1 billion acquisition deal prior to Binance’s legal case in the United States.
Last month, Michael E. Wiles, United States Bankruptcy Judge at the Southern District of New York court, denied the US government’s request to halt Binance.US’ acquisition of Voyager, citing the impact this is having on customers of the bankrupt crypto lender.
Voyager Digital now believes that the ongoing legal delays could see Binance.US pull out of the deal to acquire the firm. The embattled crypto lender’s creditors wrote;
“Consummation of the plan by April 13 is necessary to preserve massive creditor value. The evidence is uncontroverted that, if the deal is not completed, Voyager’s creditors will lose roughly $100 million in value.”
Voyager Digital stated in another filing to the U.S. Court of Appeals for the Second Circuit that there would be a price tag of $10 million per month if the delay continues. If that happens, over a million of its customers would not have access to their savings.
Binance.US could back out of the deal
According to the original terms of the agreement signed in December and approved by bankruptcy judge Michael Wiles in March, Binance.US can back out of the deal if it is not concluded within four months.
However, the US government lawyers continue to argue that the detailed terms of the contract would effectively absolve the company from breaches of tax or securities law.
This resulted in District Judge Jennifer Rearden putting the deal on hold last week while the issue was settled.
The legal battle also comes as Binance, the parent company of Binance.US and its CEO, Changpeng Zhao (CZ), face another lawsuit in the United States.
The Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and CZ last week, accusing the exchange of offering crypto trading services of commodities (Bitcoin, Ether, Binance USD, Tether and Litecoin), without proper registration.
However, CZ rejected the allegations made against Binance and himself. He called
CFTC’s claims incomplete recitation of facts.
On March 3, CZ tweeted that Binance.US could pull out of the deal to acquire Voyager Digital due to the legal delays.
We are still in support of the deal and helping returning funds to users as quickly as possible, if allowed to do so. 🙏
— CZ 🔶 Binance (@cz_binance) March 3, 2023
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