US SEC Objects to Binance US’s $1.02 billion Acquisition Deal of Voyager’s Assets

Earlier on Wednesday, February 22, an attorney representing bankrupt crypto lender Voyager Digital told the New York court plans to wind up the Binance US’s deal of acquiring Voyager’s assets are on track.

Lawyers representing Voyager Digital said that a staggering 97% of the votes have been in favour of the plan with hours left to go into voting. Addressing bankruptcy judge Michael Wiles, Allyson Smith of Kirikland & Ellis, representing Voyager said: “As of last night, creditors are still overwhelmingly voting to accept the plan at 97%. We are on track and don't anticipate any obstacles and expect to be before Your Honor again next Thursday”.

However, the U.S. Securities and Exchange Commission (SEC) is now putting barriers to Binance’s ambitions of acquiring Voyager’s assets. In its recent filings on Wednesday, February 22, the SEC said that certain elements of the proposed Binance.US-Voyager deal might infringe the law especially the plans of repaying Voyager’s former customers.

Citing the VGX token issued by Voyager Digital, the SEC said: “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. It is the Debtors’ burden to present credible evidence that the provisions of the Plan are feasible and not in violation of applicable law”.

Furthermore, the SEC cited media reports that Binance is bracing to pay the penalties for past charges of money laundering and corruption. The regulator added that in such a situation the deal could become "unfeasible" and “impossible to consummate”.

Along with the SEC, the deal has been opposed by New York State’s Department of Financial Services (NYDFS) and Attorney General Letitia James. They have accused Voyager on unlawfully serving customers in the state.

In its filing, NYDFS noted: “Despite the fact that none of the Debtors are licensed in New York, the Department is aware of allegations and other information indicating that one or more of the Debtors may have operated and may be continuing to operate in New York in violation of Applicable Law. Voyager “onboarded New York customers and thus illegally operated a virtual currency business within the state without a license, in violation of New York laws and regulations,” depriving its customers of protection.

The NYDFS also noted that the plan also discriminates New Yorkers who won’t be able to reclaim their crypto for six months.

Voyager has said that the objections by NYDFS are “hypocritical” since the regulators are themselves are limiting the the ability to distribute crypto.