The ruling from Judge Jennifer Rearden in the US District Court Southern District of New York has come after an emergency application filed by the US and the US Trustee for Region 2 for a stay, pending appeal of the Bankruptcy Court’s confirmation order
Binance.US, Voyager Digital deal put on hold by a US federal judge. (Credit: Pete Linforth from Pixabay)
A US district court has temporarily halted the more than $1bn worth acquisition of cryptocurrency firm Voyager Digital by cryptocurrency exchange BAM Trading Services (operating as Binance.US).
The ruling from Judge Jennifer Rearden in the US District Court Southern District of New York has come after an emergency application filed by the US and the US Trustee for Region 2 (collectively the government) for a stay, pending appeal of the Bankruptcy Court’s confirmation order.
With the temporary halt to the deal, the US government will gain more time to pursue the appeals that challenge the transaction’s legality, reported Reuters.
The US District Judge stated: “Upon consideration of all parties’ written submissions, as well as the conferences and oral argument held in this matter, the Government’s emergency motion is hereby GRANTED. An opinion setting forth the reasons for this ruling will issue shortly.”
Voyager Digital agreed to divest its assets to Binance.US in December 2022.
Based in California, Binance.US is an independent legal entity that holds a licensing agreement with Binance, which operates as a cryptocurrency exchange.
The transaction also involves an additional consideration equal to $20m of incremental value.
Binance.US will also make a $10m deposit in good faith and compensate Voyager Digital for some expenses up to a maximum of $15m.
In January 2023, Binance.US announced the receipt of approval from a bankruptcy court to move ahead with the Voyager Digital deal.
However, the closing of the deal was temporarily blocked following an inquiry from the US Securities and Exchange Commission (SEC).
Separately, the US Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action accusing Binance co-founder and CEO Changpeng Zhao and three entities that run the Binance platform of various violations of the Commodity Exchange Act (CEA) and CFTC regulations.