Binance.US & Voyager’s $1B Deal Opposed by SEC

Lavina Daryanani
Source: CryptoSlate

In mid-2022, crypto broker Voyager Digital filed for bankruptcy, citing market conditions. A host of companies lined up to throw Voyager a life jacket and help it avoid insolvency. At the time, FTX was a top contender. Post its collapse, the planned acquisition failed.

In January 2023, Binance.US managed to garner the court’s approval for the same. Binance.US was supposed to acquire the crypto assets and customer deposits of Voyager Digital via a $1.02 billion deal.

Also Read: Binance garners court approval to acquire bankrupt firm Voyager Digital

At press time, the SEC has now opposed Binance.US’s deal to purchase Voyager’s assets. The regulatory agency, via its recent court filing, said that the deal could end up being unlawful and discriminatory.

Additionally, other proposed tangents in the Binance.US Voyager deal might also be non-compliant with the law. The SEC indicated that the means of repaying back Voyager’s former customers was one such aspect. Elaborating on the same, the objection filing noted that the re-distribution of tokens to users would equate to the sale of unregistered securities.

Specifically, the agency pointed out, that it may violate the prohibition in Section 5 of the Securities Act of 1933.

Also Read: Voyager calls FTX a “hypocrite” for objecting Binance Deal

Binance.US x Voyager deal could become “unfeasible”: SEC

Citing a WSJ article about FTX’s collapse, the SEC pointed out how things can go wrong when crypto companies fail to safeguard customer assets.

It noted that the firm failed to “adequately describe” if third parties will have access to the keys for customer wallets. Additionally, a lack of declaration by Binance.US regarding its internal controls and practices proved vital. The filing added,

“Nor do they sufficiently explain what safeguards have been established to ensure that
customer assets are not transferred off the Binance.US platform.

The filing further brought to light that Binance is looking to pay penalties to settle past violations of money laundering and law evasion. The firm’s Chief Strategy Officer, Patrick Hillmann, expects regulators to impose fines for past conduct. Citing the same, the SEC said that the deal in question could become “unfeasible” and “impossible to consummate.”

Also Read: Binance ‘Likely’ To Pay Fine To Settle Past Violations

In two other parallel filings, Binance.US’ deal was opposed by New York State’s Department of Financial Services (NYDFS) and Attorney General Letitia James. Like the SC’s contentions, these filings allegedly pointed out that Voyager was unlawfully serving customers.