SEC Won’t be able to fine Voyager Executives-Bankruptcy Judge
2023.03.07 02:29
SEC Won’t be able to fine Voyager Executives-Bankruptcy Judge
Budrigannews.com – According to bankruptcy judge Michael Wiles, the Securities and Exchange Commission (SEC) of the United States will not be permitted to impose fines on executives involved in Voyager Digital if the company decides to issue bankruptcy tokens to assist in repaying affected customers.
On the third day of hearings on Voyager’s plan to sell $1 billion in assets to Binance and issue a repayment token, Wiles made his remarks on March 6. US.
Binance opposed the SEC’s earlier argument that the repayment token would be an unregistered security offering. US is working an unregulated protections trade.
It also objected to a legal protection that stated that no U.S. agency, including the SEC, could bring “any claim against any Person on account of or relating to the Restructuring Transactions” in a supplemental objection statement.
This basically means that, as long as the bankruptcy plan is approved by the court, executives and restructuring advisers involved in Voyager’s bankruptcy would be protected from lawsuits if they implemented it.
The SEC’s additional statement of objection to Voyager’s Chapter 11 Restructuring Plan on March 6. Source: Stretto.
According to a Bloomberg report from March 6, Wiles explained that while the SEC called these provisions “extraordinary” and “highly improper,” granting the SEC such authority would “leave a sword hanging over the heads of anybody who’s going to do this transaction.”
“With that kind of suggestion, how can a bankruptcy case or any other court proceeding function?”
However, according to Therese Scheuer, a lawyer for the SEC, the legal safeguards are so extensive that Voyager lawyers and employees would be permitted to break securities laws. Bloomberg reports that Voyagers lawyers agreed to limit the scope of legal releases after deliberation.
On July 5, the trading platform made a formal bankruptcy filing in an effort to reorganize the business and “return value” to more than 100,000 customers.
The court has been looking at a restructuring plan to get Voyager out of Chapter 11, which would be announced for the first time on December 19.
Binance would be the crypto exchange in the plan. US would purchase its assets for $1.02 billion, which Voyager deemed to be the “highest and best bid for its assets” at the time.
On February 22, the SEC objected to the sale, claiming that some aspects of the restructuring plan could violate securities laws. In a court hearing on March 2, the regulator was criticized for its ambiguous reasoning for the objection.
According to a court filing from February 28, 97% of the 61,300 Voyager account holders polled supported the current Binance. Plan for US restructuring.
