Steven Church
Amelia Pollard
US regulators won’t be allowed to punish executives or advisers involved in the bankruptcy of Voyager Digital Ltd. for creating a new cryptocurrency that would help repay customers of the failed digital asset lender, a judge said Monday.
The comments by US Bankruptcy Judge Michael Wiles reflect a growing conflict between efforts to rehabilitate troubled crypto companies and an increased regulatory push by the US Securities and Exchange Commission
Wiles’s remarks came during the third day of debate over a plan by Voyager to issue a new cryptocoin and sell itself to Binance.US, the US arm of the world’s biggest crypto exchange. SEC lawyers argue that the proposals likely will violate federal law because, in their view, the new coin is an unregistered security and Binance.US is operating an unregulated securities exchange.
SEC lawyers have opposed a routine protection given out to executives and restructuring advisers of a bankrupt company. The protection blocks lawsuits against those professionals for implementing a court-approved bankruptcy plan.
The bankruptcy is Voyager Digital Holdings Inc., 22-10943, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).
