The $1 billion deal offered by Binance.US to buy assets of bankrupt crypto lender Voyager should be put on hold while key legal objections are ironed out, the U.S. government said in a filing on Tuesday.
The move follows an appeal by the U.S. Trustee, a branch of the Department of Justice responsible for bankruptcy cases, which has concerns the deal would effectively absolve Voyager and its staff from breaches of tax or securities law.
“The Court cannot tell the Government to speak now or forever hold its peace before Voyager and Binance.US wed,” the filing by U.S. Attorney Damian Williams said. “Nothing in the Bankruptcy Code permits courts to exculpate parties from liability to the Government for past and future conduct.”
Williams said approval of the deal should be put on hold – or at least those parts which limit the government’s ability to enforce the law – until appeals are dealt with in higher courts.
Last week, New York bankruptcy judge Michael Wiles approved the deal, after showing considerable skepticism of arguments from the Securities and Exchange Commission that Voyager’s VGX token might be an unregistered security.