The Securities and Exchange Commission (SEC) of the United States has opposed to Binance.US’ acquisition of nearly $1 billion in assets from the bankrupt cryptocurrency lending business Voyager Digital. The U.S. Bankruptcy Court for the Southern District of New York stated in the filings on February 22 that it might be discriminatory and illegal.
The SEC has opened a formal investigation into whether Binance.US and connected debtors violated anti-fraud, registration, and other federal securities laws. The SEC expressed particular concern about the planned acquisition’s security of assets. Aspects of the proposed Binance. The US-Voyager merger may potentially violate the law, according to the SEC, because of how the proposal envisions compensating Voyager’s former clients.
The SEC claims that the information supplied in the intended purchase of Voyager assets does not fully describe whether Binance.US or related third parties would have access to client wallet keys or control over anybody with such access.
Citing, in particular, the VGX token, the filing by SEC claimed “the transactions in crypto assets necessary to effectuate the rebalancing, the redistribution of such assets to Account Holders, may violate the prohibition in Section 5 of the Securities Act of 1933 against the unregistered offer, sale, or delivery after sale of securities,”
Additionally, the complaint concerns a lack of protections to guarantee that user assets do not leave the Binance.US platform. Furthermore, the SEC claims that Binance.US has not declared internal controls and policies to ensure the protection of consumer assets.
Several cryptocurrency transactions will be required to rebalance assets for redistribution to account holders, according to the complaint, which the SEC believes may violate parts of the Securities Act.
The SEC is primarily interested in a portion of Binance.US’ preliminary strategy and disclosure statement for its Voyager proposal. The corporation would maintain the authority to sell Voyager-owned cryptocurrencies to account holders, which is a major source of worry for the US regulator.
The filing expresses doubts about the legality and general capacity to carry out the proposed asset reorganisation through the acquisition, as well as whether Voyager debtors will be able to retrieve some of their assets following the firm’s bankruptcy.
Voyager previously stated that the Binance.US transaction provides the best possible outcome for creditors and that the NYDFS complaints are “hypocritical” because the authorities themselves are restricting the capacity to distribute cryptocurrency.
