The U.S. Federal Trade Commission (FTC) is investigating Voyager for certain deceptive practices.
In an objection filed with U.S. Bankruptcy Court for the Southern District of New York on Wednesday, the FTC alleged that Voyager unfairly marketed cryptocurrency to the public. It objected to Voyager’s proposed plan to sell its assets to Binance.US for $1 billion on the grounds that it gives the firm a discharge to which they are not legally entitled.
Last month, Reuters reported that U.S. Bankruptcy Judge Michael Wiles allowed Voyager to enter an asset purchase agreement with Binance.US. Voyager estimated that this sale would allow its customers to recover 51% of the value of their deposits at the time of the bankruptcy filing.
The FTC argued that the court should block the sale entirely, or strike the releases and injunctive provisions, because it violates the Bankruptcy Code and relevant case law. The Code specifically prevents discharge of “fraud-related debts” held by a governmental unit, said the commission.
Essentially, the commission wants to prevent some parties involved in Voyager’s bankruptcy proceedings from certain financial claims because of the “false-representations” tied to their debt.
The U.S. SEC has also objected to the plan, but its objection specifically questions how Binance.US can afford to spend $1 billion on acquiring Voyager’s assets.
Earlier this week, Binance CEO Changpeng Zhao said the crypto exchange had pulled back some potential investments into bankrupt U.S.-based firms. Although he did not name Voyager specifically, Zhao said the exchange would seek permission before it entered into any bids going forward.