January 10 (Reuters) – Voyager Digital, the bankrupt crypto lender, won preliminary court clearance on Tuesday for a planned $1 billion transfer of its assets to Binance.US and said it would seek to accelerate a U.S. national security examination of the transaction.
Voyager was granted permission by U.S. Bankruptcy Judge Michael Wiles in New York to engage in an asset purchase agreement with Binance.US and to request creditor votes on the transaction, which will not become permanent until a future court hearing.
During Tuesday's court hearing, Voyager attorney Joshua Sussberg stated that the company was responding to concerns raised over the holidays by the U.S. Committee on Foreign Investment in the United States (CFIUS), an interagency body that vets foreign investments into U.S. companies for national security risks. He said that Voyager aims to resolve any problems that would cause CFIUS to reject the deal.
“We're working with Binance and its counsel to not just deal with that investigation, but also to voluntarily submit an application to take this process along,” Sussberg said.
CFIUS said in a court filing on December 30 that its review “may impair the parties' capacity to consummate the transactions, the timetable of completion, or pertinent terms.”
Binance's deal comprises a cash payment of $20 million and an agreement to transfer Voyager's clients to Binance.
Sussberg said that the cryptocurrency trade in the United States. Customers would be allowed to withdraw money for the first time since July.
Customers are expected to recover 51% of the value of their deposits at the time of Voyager's bankruptcy filing, according to Voyager.
If the transaction is blocked by CFIUS, Voyager will be obliged to compensate consumers with the crypto it has on hand, resulting in a smaller payment for Voyager users, according to Sussberg.
CFIUS has been increasingly utilized by Washington to block Chinese investment in the United States.
Changpeng Zhao, a Chinese-born Canadian citizen, owns Binance, which has no fixed headquarters. US authorities are investigating the corporation for money laundering. Binance.US, headquartered in Palo Alto, California, claims to be “completely autonomous” of the main Binance platform.
In addition to CFIUS, the US Securities Exchange Commission and state securities authorities rejected Voyager's planned sale. Glenn authorized Voyager to continue despite the objections, noting that securities authorities would be able to protest the sale's ultimate clearance in the future.
Voyager declared bankruptcy in July, months after the collapse of major cryptocurrencies TerraUSD and Luna shook the digital asset sector.
Voyager had intended to transfer its assets to FTX Trading, but the agreement fell through when FTX declared bankruptcy in November after a flurry of client withdrawals and fraud claims, leading to the arrest of founder Sam Bankman-Fried.
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