Voyager Digital, a Canadian cryptocurrency brokerage firm, has hit a roadblock in its plan to sell its business operations to Binance.US for $1 billion. The United States government requested an emergency stay on the deal, which was granted by Judge Jennifer Rearden of the U.S. District Court in New York on March 27.
The temporary halt came as a surprise to many industry insiders who were anticipating the completion of Voyager's sale. The company had announced its intention to sell itself in February and had received approval from its shareholders earlier this month.
However, the U.S. government raised concerns about national security risks associated with the acquisition by Binance.US, which is owned by Chinese entrepreneur Changpeng Zhao. The court order did not provide details regarding these concerns but cited "the interest of justice" as a reason for halting the sale.
The decision is likely to have far-reaching consequences not only for Voyager and Binance.US but also for other cryptocurrency companies planning similar deals involving foreign entities.
According to legal experts, such regulatory hurdles are expected given increased scrutiny from governments around issues related to money laundering and terrorism financing through cryptocurrencies.
Voyager CEO Steve Ehrlich said that they would work with regulators and continue discussions with potential buyers while respecting any legal process underway.
Meanwhile, Binance.US issued a statement claiming that it was committed to complying with all applicable laws and regulations and looked forward "to resolving any issues quickly so we can continue our mission of making digital assets more accessible."
The delay in closing this deal has put both companies' plans for expansion at risk since they could miss out on opportunities in what is becoming an increasingly competitive market. However, until further notice from the court or resolution between both parties involved happens; there will be no movement towards finalizing this transaction anytime soon.
Conclusion
Although no one knows how long the halt will last, it is clear that the U.S. government's concerns about national security risks have slowed down Voyager's sale to Binance.US. While both companies are hopeful of resolving this issue quickly, they will need to navigate a complex regulatory landscape and address any potential security risks associated with foreign ownership if they hope to continue expanding into new markets.