According to two legal filings that were published late on Sunday night, bankrupt cryptocurrency lender Voyager has justified its $1 billion deal to sell assets to crypto exchange Binance.US, calling criticisms of the proposal “hypocrisy and chutzpah” based on unsubstantiated speculation.
In addition to Alameda Research, the trading arm of the closed-down crypto exchange FTX, the United States Securities and Exchange Commission (SEC), the Department of Justice (DoJ), and a large number of state-level regulators have voiced their opposition to the plan. A hearing on the matter is scheduled to take place in a New York bankruptcy court on Tuesday.
According to Voyager, concerns raised by the SEC, along with other financial regulators from New York, Texas, and Vermont as well as the U.S. Trustee, which is the bankruptcy section of the DoJ, over whether or not Binance.US can afford the acquisition are “misplaced.”
The filing further added, “Raising Disclosure Statement objections based on unsubstantiated and unverified media reports while ignoring the substantial information already made available to the Objectors is a naked attempt to undermine the Binance.US Transaction and attack Binance.US.”
Countering FTX-Alameda Opposition
An effort by Alameda to reject the deal on the premise that it violates the hierarchy of creditors laid out in United States bankruptcy law is met with a response that is even harsher than before. According to the filing made by Voyager, the arguments presented by Alameda “evince hypocrisy and chutzpah at its finest” and are “frivolous.”
Prior to Voyager’s bankruptcy filing on November 11, FTX and Alameda made an attempt to save the company by providing financial assistance. Voyager stated that it “only entered into the AlamedaFTX Loan Facility based on AlamedaFTX’s fraudulent and false representations,” adding that FTX’s own intended purchase of Voyager was another last effort to disguise the cracks on its own balance sheet arising from their noticeable deception.
The current Chief Executive Officer of FTX, John Ray, is on record as criticizing his predecessor, Sam Bankman-Fried, for what he perceives to be incompetence and poor record-keeping. Bankman-Fried has entered a not guilty plea to the charges against him, which include laundering money and engaging in wire fraud.
The filing criticized what it termed a “hypocritical” posture taken by state regulators, who were opposed to a situation in which residents of Vermont, New York, Texas, and Hawaii would obtain cash dividends but residents of other states would receive cryptocurrency instead.
As per the filing, “They object to the fact that Account Holders in their jurisdiction would receive cash when it would be their own regulatory decisions (unless they decide to provide fairly straightforward, basic accommodations to their own citizens) creating this result.”
In a volatile cryptocurrency market, Voyager, backed by a working group that represents its creditors, stated that the Binance deal reflects the best possible solution for those who are owed money by the estate, and added that there are still escape routes to the agreement if a smarter move was established later on.
