FTC Objects to Voyager Digital Restructuring

The Federal Trade Commission has objected to crypto broker Voyager Digital’s third attempt at a bankruptcy restructuring plan, saying it would unlawfully bar the company from being held accountable for “actual fraud, willful misconduct, or gross negligence.”

If the judge confirms the plan as it’s currently written, the FTC could technically be stopped from pursuing legal action or issuing fines against Voyager and its former employees. FTC attorney Katherine Johnson called the plan a “disguised discharge.”

The FTC is an independent agency of the US government that is tasked with promoting consumer protection and preventing anticompetitive business practices. In the context of corporate mergers and acquisitions, the FTC is responsible for reviewing proposed transactions to ensure that they do not harm competition in the relevant markets.

Bankruptcy Judge Michael Wiles conditionally approved Voyager’s restructuring plan on January 13 and scheduled a hearing to confirm it next Thursday, on March 2, in Manhattan. Meanwhile, thousands of Voyager customers with frozen assets on the exchange wait in limbo until the transfer over to Binance.US can be completed. 

What the FTC has a problem with is the language in the agreement which states “…any person or entity who has a legal claim against Voyager that predates confirmation of its restructuring plan “shall be precluded and permanently enjoined on and after the Effective Date from interfering with the use and distribution of the Debtors’ assets in the manner contemplated by the Plan.”

Now their creditors wait and see whether Voyager will have to submit a new or revised plan ahead of the March 2 hearing.