Both the Texas Department of Banking (DOB) and the Texas State Securities Board (SSB) have initiated legal challenges. The disclosure statement submitted by Voyager Digital is the subject of the objection.
The lawsuit calls Voyager Digital’s methods and computations into question.
Legal Action Against Voyager Digital
The legal representatives for the SSB and DOB have filed court objections against Voyager Digital. The Southern District of New York Bankruptcy Judicial will handle the court proceedings.
The ruling finding Voyager’s updated disclosure statement insufficient is being contested. The complaint was presented to the court by the opposition.
Voyager Digital announced a recovery strategy to its investors in July 2022. Therefore, it concurrently files for Chapter 11 bankruptcy in New York.
Texas authorities contested Voyager’s disclosure declaration. The criticism goes against Voyager’s methods for determining its average coin values.
According to Voyager’s disclosure document, creditors might get a return of 70%.
These authorities also said that neither the SSB nor the DOB had ever granted a license to the Debtors (Voyager). Additionally, these authorities emphasized that the Debtors would be subject to very steep fines and other penalties for doing business illegally.
Additionally, FTX lacks a business license to operate in the State of Texas.
The attorney also called the court’s attention to a few open problems. These problems have to do with the cryptocurrency exchange FTX.
The attorney draws attention to the fact that FTX offers a product similar to the “Voyager Earn Program” In contrast, several US states have issued cease-and-desist orders against the Voyager service.
Both The SSB and The DOB Have Demanded a Compromise
A settlement between the SSB and the DOB is now being negotiated. They both ask that Voyager’s disclosure statement be rejected in its current form.
As part of the settlement, it also demands that Voyager reveal its methodology and calculations. This covers the techniques used to measure the fair market value of its assets to recover funds.
FTX US was given the go-ahead to buy the assets of Voyager on October 5. The award was given out after FTX US made the highest purchasing bid.
According to Voyager, the offer reflected the “fair market valuation” of the company’s cryptocurrency assets. “At a to-be-determined point in the future,” the acquisition was anticipated to cost $1.3 billion. This is added to a $111 million “incremental value.”
Celsius’s Legal Troubles
As of this article’s time, the case’s preliminary hearing was scheduled to take place on October 19.
Three regulatory agencies objected to the cryptocurrency lender Celsius on September 30. The Department of Banking, The State Securities Board, and the Vermont Department of Financial Regulation are these regulating bodies.
The opposition is against Celsius’s intentions to sell up its stablecoin assets. They said that by starting up again, the business might use the money to break the law in the state.
Celsius has applied to get permission to sell its stablecoin holdings. The Southern District of New York’s US Bankruptcy Court received the application.
According to Celsius, the value of stablecoin assets is $23 million.