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SEC objection to Voyager-Binance.US deal questioned by US judge

A United States judge scolded the Securities and Exchange Commission over its vague objection to Voyager’s restructuring deal and asked for specifics on its concerns.

The bankruptcy judge on Voyager Digital’s case has reportedly scolded the United States securities regulator over its ambiguous reasoning for objecting to the crypto lending firm’s proposed sale to Binance.US.

At a March 2 hearing in a New York court, U.S. bankruptcy judge Michael Wiles said the Securities and Exchange Commission had basically asked to “stop everybody in their tracks” without explaining how to address concerns it had over the deal, according to a Reuters report.

The court was considering a restructuring plan announced on Dec. 19 to bring Voyager out of Chapter 11 bankruptcy that would see crypto exchange Binance.US acquire its assets for $1.02 billion — an option Voyager said at the time represented the “highest and best bid for its assets.”

The SEC, however, filed an objection to the sale on Feb. 22, claiming aspects of the restructuring plan could breach securities laws, namely the crypto transactions that will need to happen to rebalance funds to redistribute to Voyager account holders.

In court, SEC attorney William Uptegrove offered a reserved answer to Judge Wiles when asked if the regulator believes the plan violated the law, saying:

“We can’t take a position at this point. The SEC is a deliberative body, and its process is a nonpublic one by federal law.”

Wiles hit back, saying “deliberative is one thing, but what have you done?” and added, “if there are reasons to be concerned here, I need to hear specifics.”

⚠️ Judge Wiles slamming the SEC rep about their objection. ⚠️

Says, (paraphrase) “You’re asking the debtor to prove that the cryptos being transacted are not securities, but you’ve given no regulatory guide as to what that is.”

— VGX Heroes (@VGX_Heroes) March 2, 2023

The sale requires court approval, along with the go-ahead from the SEC and the Committee on Foreign Investment in the United States (CFIUS), which is probing the deal to review if it will entail a foreign investment and raise national security concerns.

Judge Wiles is set to hear continued arguments on the bankruptcy plan on March 3.

The proposed Binance.US plan would transfer Voyager customers to the crypto exchange. Those customers would then be able to withdraw their funds for the first time since the platform filed for bankruptcy last July.

Customers would reportedly recover over 70% of their deposited value as of the time of the bankruptcy. In a poll of 61,300 account holders with claims against the crypto lender, the plan was favored by 97% of Voyager’s customers.

Celsius amasses 30 potential bidders for its assets, withdrawal motion approved

The bankrupt lender is set to hold auctions for its assets in January, while it’s been given the green light to return some customer funds.

Bankrupt crypto lender Celsius Network has attracted 30 potential bidders for its various assets, including its retail platform and mining business.

According to a company presentation filed on Dec. 20, more than 125 parties have been contacted since September, with 30 potential bidders executing non-disclosure agreements — a legal contract used to protect sensitive information about a company or the bidding terms that is typically required during negotiations.

Celsius said that so far, it has received multiple bids proposing a variety of potential transactions and business structures to acquire its assets — such as migrating Celsius customers to the acquirer’s platform along with a haircut of their assets .

The lending platform also revealed it had received a number of single asset bids.

With the bidding deadline reached on Dec. 12, the auction for Celsius’ various assets is now set for Jan. 10, after being pushed back from the original date of Dec. 15, according to earlier documents filed by Celsius.

*Amended dates for bidding procedures as per Celsius court filings on Dec. 15. Source: Stretto*

The latest presentation notes that as of Nov. 25, the company held crypto valued at approximately $2.6 billion, but even after this is combined with all of its non-crypto assets, Celsius is still $1.2 billion short of being able to pay off all debts.

Its ongoing mining operations have been successful, however, with Celsius claiming that it has generated positive operating cash flow every month this year as it continues to deploy more mining rigs.

In related news, on Dec. 20 bankruptcy judge Martin Glenn granted a motion filed by Celsius on Sept. 1, allowing them to reopen withdrawals for a minority of their customers.

The assets eligible to be withdrawn are those that were only ever held in the Custody Program; for amounts less than $7,575; and for funds that were transferred from Earn or Borrow Programs into the Custody program within 90 days of Celsius filing for bankruptcy on July 13.

The order also applies to “ineligible Withhold Assets,” with assets included in this definition to be determined following meetings between Celsius, the Withhold Ad Hoc Group and the Celsius Official Committee of Unsecured Creditors.