Voyager Digital (OTC:VYGVQ) was caught off guard when Binance.US abruptly backed out of a $1 billion deal to purchase its assets, citing an "uncertain regulatory climate" in the U.S.
According to Voyager's attorneys, Binance.US had expressed interest in closing the transaction as recently as last week. During a bankruptcy court hearing in the Southern District Court of New York, Christine Okike of law firm Kirkland & Ellis, representing Voyager, stated that "the debtors reserve all rights against Binance.US for breach" of the deal, Coindesk reported.
Given the collapse of the Binance.US deal, Voyager's creditors are expected to receive recoveries in the range of 40% to 65%, depending on the outcome of a parallel lawsuit involving bankrupt crypto exchange FTX, and how much recovery FTX offers its creditors.
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Okike also stated that Voyager would attempt to give creditors back their holdings in the original cryptocurrency, but warned that a shifting legal position of U.S. regulators could complicate Voyager's ability to do so.
"We're faced with a situation where the SEC [Securities and Exchange Commission] may not have taken a position or issued a formal order with respect to [Voyager's token] VGX," Okike said, "But they've made certain allegations that could make it untenable in certain situations for the debtors, for instance, to sell VGX into the market."
The regulatory uncertainty that would require payments to be made in cash applied to tokens with a potential total value of $1.6 million within an overall estate of around $1 billion, Okike said.
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Disclosure: Benzinga CEO Jason Raznick is a member of the unsecured creditor committee in the Voyager Digital bankruptcy case.