According to Judge, The US Government’s Case Against Voyager-Binance.US Agreement Has ‘Substantial’ Merits

On Friday, a New York judge ruled that the U.S. government has a “substantial case on the merits” in its quest to block Binance.US‘s $1 billion acquisition of the assets of insolvent crypto lender Voyager.

Since delays could cost the estate up to $10 million monthly, District Judge Jennifer Rearden said she would attempt to resolve a dispute quickly.

Earlier in March, U.S. Bankruptcy Judge Michael Wiles approved the sale. Still, this week, Rearden said she would place that approval on pause. At the same time, she considered objections from the U.S. Attorney that the contract effectively immunized Voyager from violations of tax or securities law.

Rearden stated that neither Voyager nor its creditors “has provided any authority for the proposition that a bankruptcy court can release criminal liability” in response to government arguments.

In her additional reasoning published on Friday, Rearden appeared sympathetic to the government’s arguments, stating that “the Exculpation Clause appears to go beyond what the quasi-judicial immunity doctrine permits.”

Binance’s U.S. subsidiary bid for Voyager after the previous suitor, FTX, failed. This week, the Commodity Futures Trading Commission filed a lawsuit against Binance’s global entity and its CEO, Changpeng “CZ” Zhao, for offering unregistered crypto derivatives. According to Zhao, the suit is an “incomplete recounting of the facts.”

Rearden has set a quick deadline to resolve the Voyager matter, requiring the government to submit its brief by April 7 and Voyager to respond by April 18.

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