US officials appeal protections for Voyager execs in Binance.US Sale

The DOJ opposes the legal protections granted to people engaged in the Voyager sale to Binance.US, claiming that the court “inappropriately” extended its power.

Officials in the United States seek to remove a provision in bankrupt lender Voyager Digital’s proposal to transfer its digital assets to crypto market Binance.US that would bar them from pursuing anyone engaged in the sale lawfully.

U.S. trustee William Harrington and other government counsel contended in a motion filed on March 14 in a New York bankruptcy court that “the court improperly exceeded its statutory power” in approving the pardon.

They asked the court to postpone the sale approval for two weeks so they could file an appeal.

According to a Feb. 28 filing, the provision prevents those involved in carrying out the sale from being held personally accountable for its implementation, which the court allowed on March 7 after it was discovered that 97% of Voyager customers favoured the plan.

While the United States does not object to other aspects of the proposed sale, it claims the provision will hamper the government’s “ability to implement its police and regulatory powers.”

The Securities and Exchange Commission of the United States also objected to the plan on March 6, citing the “extraordinary” and “highly improper” exculpation provision, claiming that the repayment token would constitute an unregistered security offering and that Binance.US operates an unregulated securities exchange.

A hearing on the matter is scheduled on March 15 at 2:00 p.m. Eastern Time.

According to the most recent calculations, the proposal will result in Voyager creditors regaining around 73% of the value of their investment.