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A federal judge on Monday temporarily stopped bankrupt Voyager Digital from completing a proposed $1.3 billion sale to crypto exchange Binance.US, allowing the U.S. government more time to pursue appeals that challenge the legality of the deal, Reuters reported. The U.S. Attorney's Office for the Southern District of New York and the Office of the U.S. Trustee, the Department of Justice's (DOJ) bankruptcy watchdog, filed appeals in early March over a bankruptcy court's approval of the sale. They argued that the protections could rubber stamp crypto tokens that might be unregistered securities, as well as transactions that could be illegal under U.S. securities laws. U.S. District Judge Jennifer Rearden in Manhattan ruled Monday that the sale should be put on hold, overruling Voyager's argument that a delay could cause Binance.US to back out of the deal entirely. Binance.US and Voyager did not immediately respond to requests for comment late on Monday.

Binance and its founder Changpeng Zhao are being sued by the Commodity Futures Trading Commission for numerous alleged violations of the Commodity Exchange Act and CFTC regulations, the Associated Press reported. Binance’s former chief compliance officer, Samuel Lim, was also charged with aiding and abetting Binance’s violations. In its complaint, the CFTC claimed that cryptocurrency exchange giant Binance “allegedly chose to knowingly disregard applicable provisions of the CEA while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.” For example, Binance did not require customers to provide any identity-verifying information. It also communicated with U.S. customers using a messaging platform that automatically deleted written communications. The CFTC filed the complaint Monday in the U.S. District Court for the Northern District of Illinois. It is seeking disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations.

After a harrowing 2022, when the easy money for start-ups dried up, leading to slashed valuations, lowered ambitions and widespread layoffs, many hoped things would bounce back this year. But SVB’s collapse has stoked even more anxiety and dread, which is beginning to manifest in start-up dealmaking throughout Silicon Valley, the New York Times reported. Late Sunday, SVB was acquired by First Citizens BancShares. The failed bank’s former parent company, SVB Financial, filed for bankruptcy on March 17 and plans to run a separate process to sell various units. Over the past two weeks, while regulators scrambled to find a buyer for SVB, companies that relied on it for lines of credit have scrambled to secure a new source of debt. Investors, wary of risk, have increasingly chosen to sit on the sidelines or are too busy helping to shore up existing start-ups to entertain new deals. And some young companies are doing what they can to avoid raising new funding so they do not have to face lower valuations, onerous terms and stringent due diligence. The result is that a chilly environment for tech start-ups has rapidly gotten chillier.

Some banks are rolling out the welcome mat for cryptocurrency firms that found themselves in need of banking services after the downfall of two big crypto-friendly lenders, Signature Bank and Silvergate Capital Corp., the Wall Street Journal reported. As crypto companies have scrambled to establish new bank relationships, industry executives say they have received a positive reception from regional banks such as Customers Bancorp, based in West Reading, Pa., and Fifth Third Bancorp, based in Cincinnati. Other crypto firms are moving deposits to smaller upstart banks that tout themselves as digital pioneers, such as New Jersey-based Cross River Bank. Still others are considering taking their banking business offshore. Meanwhile the biggest banks — such as JPMorgan Chase & Co. and Bank of New York Mellon Corp. — still do business with crypto clients, though they are selective about their client list and what banking services they provide.

Since Elon Musk took over, Twitter Inc. has faced a growing list of claims that it hasn’t paid its bills as the social media company aims to break even this year, the Wall Street Journal reported. Landlords, consultants and vendors in recent months have made demands for payments in at least nine lawsuits, with their complaints totaling more than $14 million plus interest. Musk inherited the bills when he took control more than three months ago and quickly implemented a more austere spending style as part of his signature intensity. “What Elon Musk is doing is basically simulating a bankruptcy,” said Van Conway, a restructuring expert who has helped distressed companies for almost 40 years. “He is taking a machete to his costs.” Since late October, Twitter has undergone dramatic changes as Mr. Musk has raced to remake the product of a company with a track record of losing money and slash costs amid an advertiser pullback and deal-related debt expenses. He has cut staff sharply and balked in tweets at spending, including what he said was $13 million a year on employee meals at the company’s headquarters.

Avaya Holdings Corp. on Tuesday filed for chapter 11 for the second time in six years as it struggles to transform itself from a traditional office telecommunications equipment business into a subscription-based software provider, WSJ Pro Bankruptcy reported. The company said that it filed in the U.S. Bankruptcy Court in Houston with a plan supported by most senior lenders to cut its debt by more than 75%, to roughly $800 million from $3.4 billion, and turn the page on an earnings miss last year that depressed the prices of its debt and stock. Avaya said that it has received commitments for $628 million in debtor-in-possession financing, including a new $500 million loan from an investor group led by Apollo Global Management Inc. and Brigade Capital Management LP, as well as a $128 million credit facility from a bank syndicate led by Citigroup Inc. Certain members of the investor group have also agreed to provide an additional $150 million in new money through a rights offering. The company said that it expects to complete the prepackaged bankruptcy process in 60 to 90 days.

The Treasury Department is warning about potential vulnerabilities caused by financial institutions relying on a small number of providers for cloud-computing services, convening a group of U.S. officials to study the issue, the Wall Street Journal reported. The Treasury said in a report to be released Wednesday that banks and other financial institutions are increasingly using remote computing services known as the cloud, part of a broader shift in how businesses manage their technology needs. Many are using these services for software such as email, and a smaller number are relying on it for more sensitive infrastructure such as data storage. The report says that many financial institutions buy cloud-computing services from a small number of businesses, particularly Amazon.com Inc., Microsoft Corp. and Alphabet Inc.’s Google. That means a technical breakdown or cyberattack on one of those companies could have broad consequences for the financial-services sector, the department said. “A large system failure or data breach at one of these [cloud-service providers] could impact multiple financial institutions or U.S. consumers, though there are open questions about the extent of that impact,” the report says.

Rockley Photonics Holdings Ltd., which makes microchips that can be used in wearable health monitoring devices, filed for bankruptcy with a creditor-backed plan that will hand control of the business to bondholders, WSJ Pro Bankruptcy reported. Publicly traded Rockley said in court papers filed Monday in the U.S. Bankruptcy Court in New York that it has won support for a chapter 11 plan of reorganization under which bondholders who are owed roughly $119 million will forgive that debt in exchange for equity in the reorganized business. Bondholders also agreed to provide Rockley with $35 million in new financing in the form of a chapter 11 exit loan and private placement agreement offering bondholders the right to purchase an additional $20 million of the reorganized company’s stock. Rockley said the restructuring plan was negotiated and agreed to following a monthslong marketing process spearheaded by the company’s investment banker, Jefferies LLC. Rockley said that although it has developed groundbreaking silicon photonics chips that can be used in wearable health monitoring devices, the company has yet to bring any products to market. The company said it is working with other businesses on specific designs for its chips and it has shipped some early prototypes, anticipating the chips will ultimately be used in wearable health monitoring devices. President and Chief Executive Richard Meier said in a sworn statement that Rockley recorded net losses of $117 million in the nine months ended Sept. 30. Mr. Meier said the chapter 11 plan is a significant achievement given Rockley’s liquidity issues and added the restructuring should ensure the company’s long-term viability.