A federal judge has temporarily halted the $1.3 billion acquisition of Voyager Digital assets by Binance.US, citing concerns over possible violations of securities laws.
The ruling, issued on Wednesday by Judge Richard M. Berman in Manhattan, comes after investors filed a class-action lawsuit against Voyager Digital alleging that the company had violated securities laws by failing to disclose key information about its financial health and business operations.
In his ruling, Judge Berman expressed concern that if the sale were allowed to proceed as planned, investors could be harmed if it is later determined that Voyager Digital failed to provide accurate information about its finances and operations.
"The court finds that plaintiffs have demonstrated a likelihood of success on their claims," Judge Berman wrote in his decision. "Accordingly, defendants are enjoined from proceeding with any closing or other consummation of the proposed transaction."
The acquisition was first announced in February 2021 when Binance.US agreed to acquire certain digital assets held by Voyager for $1.3 billion. The deal was expected to close within months but has been delayed due to regulatory scrutiny.
Voyager Digital is a publicly traded cryptocurrency brokerage firm that allows users to trade various cryptocurrencies like Bitcoin and Ethereum through its platform. The company has seen significant growth over the past year as more people have turned towards investing in cryptocurrencies.
Binance.US is an American subsidiary of Chinese cryptocurrency exchange giant Binance Holdings Ltd., which operates one of the world's largest cryptocurrency exchanges.
Both companies have yet to comment on the recent court decision or provide any updates regarding their plans for moving forward with the acquisition.
Investors who are part of the class-action lawsuit against Voyager Digital say they are pleased with Judge Berman's decision and hope it will lead towards greater transparency and accountability within the cryptocurrency industry going forward.