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U.S. Bankruptcy Court Judge Michael Wiles appeared heavily skeptical about an attempt by the Securities and Exchange Commission (SEC) to stop a purchase by Binance.US of assets of defunct crypto lender Voyager Digital at a Thursday court hearing.

The securities regulator said the $1.02 billion deal should be blocked because Voyager’s token could constitute an unregistered security.

“You come here and tell me … that I should stop everybody in their tracks because you might have an issue,” Wiles said, addressing counsel for the SEC. “It's kind of a weird objection.”

Wiles, who is with the Southern District Bankruptcy Court in New York, said he was "absolutely shocked" at the SEC's objection, saying it was asking Voyager to prove a negative with little guidance from the regulator.

“I get the feeling that this objection has been made as a kind of cover, so you can say later that we'll see we raised these issues,” he said. “You haven't really, you have done nothing … I need to know specifics.”

William Uptegrove, representing the SEC, said that creditors had not been sufficiently warned of regulatory risks, but declined to take a definitive position on whether VGX was a security.

Counsel for Voyager told the court that the deal could see creditors achieving 73% recovery, a revision upward thanks to the recently bullish crypto market. Court filings show that 97% of its customers, representing 98% of total claims, had voted in favor of the deal, though it has found less favor with regulators.

The Securities and Exchange Commission has warned it could involve the unlawful sale of unregistered securities, and the Federal Trade Commission said it was probing Voyager for deceptive marketing, while Texas regulators said creditors weren’t properly warned of legal risks.