SEC objects to Binance.US’s $1 billion Voyager deal over alleged sale of unregistered securities

A $1.02 billion deal by Binance.US to buy assets from defunct crypto lender Voyager has been opposed by New York and federal financial regulators, who said on Feb. 22 that it could prove discriminatory and illegal to be.

The move follows increasing interventions in crypto by the Securities and Exchange Commission, whose investigation into alleged sales of unregistered securities recently caused crypto exchange Kraken to halt crypto staking operations.

Elements of the proposed Binance.US-Voyager deal may also violate the law, given how the plan reimburses Voyager’s former clients, the SEC said.

According to the deal, “the transactions in crypto assets required to rebalance, the redistribution of such assets to account holders, may violate the prohibition in section 5 of the Securities Act of 1933 against unregistered offerings.” , the sale or delivery after sale of securities,” according to a filing from the SEC, citing specifically the VGX token issued by Voyager.

“It is the debtors’ burden to provide credible evidence that the provisions of the plan are enforceable and do not violate applicable law,” the SEC said. The regulator also cited media reports that Binance is bracing to pay fines for previous violations of money laundering and corruption law as evidence that the deal could become “unfeasible” and “impossible to complete”.

“Despite the fact that none of the Debtors is licensed in New York, the Department is aware of allegations and other information indicating that one or more of the Debtors may have been operating in New York and may continue to operate in violation of applicable law,” the NYDFS filing said.

Voyager “onboarded New York customers and thus illegally operated a virtual currency company within the state without a license, in violation of New York law and regulation,” denying its customers protections, the filing said. The plan also discriminates against New Yorkers who cannot reclaim their crypto for six months while Binance.US gains approval in the state, NYDFS said.

Voyager had previously argued that the Binance.US deal offers the best possible outcome for creditors and that NYDFS’s objections are “hypocritical” because the regulators themselves restrict the ability to distribute crypto.

Voyager’s creditors themselves had until 4 p.m. Eastern Time on Wednesday to approve the deal, and the company’s counsel has said the vast majority had done so with just a few hours of voting left.






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