US Bankruptcy Judge Michael Wiles made the comments during a hearing in New York on March 2.
Voyager Digital’s restructuring plan would involve selling just over $1 billion of its assets to Binance.US. However, the SEC opposed the deal, saying it violated securities laws.
Asked about the reasoning behind the objection, SEC attorney William Uptegrove did not provide a definitive answer, according at Reuters.
In his typical vague approach, the SEC attorney said, “we can’t take a position at this point,” before adding, “the SEC is a legislative body, and its process is non-public under the federal law”.
Judge Wiles was not too impressed with this response:
“Deliberation is one thing, but what have you done? If there’s reason to be concerned here, I need to hear specifics.
SEC Crypto Warpath continues
The SEC has escalated its war on crypto this year and appears to be “carpet bombing” the entire industry. Gary Gensler and his team are convinced that every crypto asset outside of Bitcoin is a security.
In this specific case, the regulator says Voyager’s sale of VGX violated securities laws, but has not yet provided details.
If the Voyager Binance deal is approved by Judge Wiles, the asset sale cannot be completed until final approval from the SEC and the Committee on Foreign Investment in the United States (CFIUS), all of which are two in opposition.
Speaking to the SEC attorney, Judge Wiles continued, “You come here and tell me…that I should stop everyone in their tracks because you might have a problem,” adding, “It’s is kind of a weird objection.
“I feel like this objection was made as a sort of cover, so you can say later that we’ll see that we raised these issues,”
Voyager customers in favor
According to Voyager lawyer Christine Okike, it is estimated that the sale will allow customers to recover around 73% of the value of their deposits when the crypto lender files for bankruptcy.
A recent survey of Voyager account holders with complaints found that 97% were in favor of the restructuring agreement.
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