Investors' Life Savings At Risk As Binance.US's Acquisition Of Voyager Digital's Assets Faces Regulatory Backlash

The U.S. Department of Justice (DOJ) filed an appeal late Thursday evening challenging the decision of a New York bankruptcy judge to approve Binance.US's billion-dollar acquisition plan for bankrupt cryptocurrency lender Voyager Digital's assets.

The appeal was filed by the U.S. Trustee's Office, which oversees bankruptcies.

This came just a day after Judge Michael Wiles approved the deal following a contentious, four-day hearing.

Regulators, including the U.S. Securities and Exchange Commission (SEC) and various state regulators, have been opposed to the proposed deal.

The SEC filed an objection to the purchase of Voyager last month, arguing that Binance.US may be violating federal securities laws by operating an unregistered securities exchange in the U.S.

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During the hearing, Judge Wiles dismissed the SEC's concerns, stating, "Things have to be done. We have creditors who are waiting and who in the midst of all of this uncertainty have no access to the property in which they’ve invested, in some cases, their life savings, so we have to take some kind of action. We have to do something."

Under the proposed sale to Binance.US, Voyager's customers could see an estimated 73% recovery, and the plan has the support of 97% of Voyager's creditors.

If the deal falls through or regulators successfully block the sale, Voyager may have to liquidate, which would likely result in much smaller returns for creditors.

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Disclosure: Benzinga CEO Jason Raznick is a member of the unsecured creditor committee in the Voyager Digital bankruptcy case.