Voyager Digital Shielded from SEC Fines Over Bankruptcy Token Issuance, Says US Judge

Bankruptcy judge Michael Wiles has stated that the United States Securities Exchange Commission (SEC) cannot impose fines on executives linked to Voyager Digital if the company issues bankruptcy tokens to reimburse affected customers.

This decision was made during hearings concerning Voyager's plan to sell $1 billion of assets to Binance.US and issue a repayment token, which the SEC argued would be an unregistered security offering.

The SEC also objected to a legal protection that would prevent any U.S. agency from bringing claims against individuals involved in Voyager's restructuring, provided that the court approves the bankruptcy plan. Therefore, executives and restructuring advisers involved in Voyager's bankruptcy will be protected from legal action if they carry out the bankruptcy plan.

According to a Bloomberg report on March 6, the SEC criticized the legal protections in Voyager's bankruptcy plan, calling them "extraordinary" and "highly improper."

However, Wiles disagreed and stated that granting the SEC such power would create an atmosphere of uncertainty and fear for those involved in the transaction, asking how a court proceeding could function with such a suggestion.