A $1.02 billion deal by Binance.US to purchase assets of defunct crypto lender Voyager has been opposed by New York and Federal finance regulators.
The U.S. Securities and Exchange Commission (SEC) filed a motion against the sale of Voyager’s assets in the amount of $1 billion to Binance.Us crypto exchange. The deal would include the sale of non-registered securities, said the SEC, according to a filing submitted to the US bankruptcy court for the southern district of New York on Wednesday.
The move follows increasing interventions into crypto by the Securities and Exchange Commission, whose probes into the alleged sales of unregistered securities recently caused crypto exchange Kraken to shutter crypto staking operations.
Elements of the proposed Binance.US-Voyager deal may also infringe the law, given how the plan envisages repaying Voyager’s former customers, the SEC said. Under the deal, “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,” a filing by the SEC said, citing in particular the VGX token issued by Voyager.
“It is the Debtors’ burden to present credible evidence that the provisions of the Plan are feasible and not in violation of applicable law,” the SEC said. The regulator also cited media reports that Binance is bracing itself to pay penalties for past infractions of money laundering and corruption law as evidence that the deal could become “unfeasible” and “impossible to consummate.”
The deal was also opposed by New York State’s Department of Financial Services (NYDFS) and Attorney General Letitia James in two Feb. 22 filings, including allegations that Voyager was unlawfully serving customers in the state.
“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.”the NYDFS filing said.
SEC Currently Investigating Binance.US
Furthermore, the SEC cited recent reports about U.S. regulators’ probe into Binance over money laundering rule violations as a reason the deal would not pull through.
“There are numerous public reports and press accounts concerning investigations into the purchaser and its affiliates. Regulatory actions, whether involving Voyager, Binance.US, or both, could render the transactions in the Plan impossible to consummate, thus making the Plan unfeasible,” the commission added.
Meanwhile, the SEC is not the only entity that has objected to the deal. The Federal Trade Commission (FTC) and New York State’s Department of Financial Services (NYDFS) have filed separate oppositions.