Regulators Step in to Prevent Acquisition of Voyager Digital by Binance US
- US regulators have filed a motion against the acquisition of assets belonging to Voyager Digital by Binance US for over $1 billion.
- The SEC, along with the U.S. Trustee within the Justice Department and state regulators from New Jersey and Vermont, have filed motions objecting to the deal.
- The regulators question the ability of Binance US to acquire the assets belonging to Voyager and its relationship with its parent firm.
- The concerns have risen following the collapse of FTX which shows that authorities have become quite vigilant.
The collapsed multi-billion dollar crypto exchange, FTX, was supposed to acquire the assets belonging to Voyager Digital, a crypto lending platform, but it wasn’t able to do so despite winning the bid for the same because of its bankruptcy in November. The bid was once again reopened, and this time, Binance US, the US arm of the world’s biggest crypto exchange, decided to purchase the assets belonging to Voyager Digital for over $1 billion.
As per a report from Reuters, the United States Securities and Exchange Commission (SEC) is looking into the acquisition of Voyager Digital by Binance US and is not in favor of the deal due to concerns regarding the world’s largest crypto exchange by trading volume. According to a bankruptcy court filing on Wednesday, the regulator pointed out Binance US’ failure to include necessary information in its disclosure statement.
Furthermore, the filing states that the regulator wants more details on the purchase agreement and has questioned the ability of Binance US to purchase the assets belonging to Voyager Digital. This is because prior to this exchange, FTX was supposed to purchase the crypto lender’s assets but was unable to do so because of its liquidity crunch, and the authorities were not aware of this.
Moreover, the SEC has questioned “the nature of the company’s business operations following the deal,” according to the Reuters report. Additionally, the US regulators want the judge to pause the deal until Binance US doesn’t reveal its financial details and its corporate relationship with the world’s largest crypto exchange, which operates under the leadership of Changpeng Zhao, also known as CZ in the crypto space.
It is also crucial to note that the SEC, along with the U.S. Trustee within the Justice Department and state regulators from New Jersey and Vermont, have filed motions objecting to the deal. Additionally, the SEC argued that “the current disclosures for the purchase don’t include “necessary information” required for the purchase.
Furthermore, the New Jersey Bureau of Securities noted that “following the transfer of coins to Binance.US, Binance.US will have the freedom to direct the cryptocurrency as it wishes, such that without customer knowledge, the cryptocurrency might wind-up in an offshore (non-US custodial) account, outside the reach of U.S. regulatory and enforcement authorities.”
The concerns regarding the location of the funds have risen following the collapse of FTX under Sam Bankman-Fried, also known as SBF in the crypto space. Interestingly, authorities believe that SBF had worked with foreign regulators to transfer assets that the US arm of FTX was working to recover via its Chapter 11 bankruptcy proceedings. The regulators in the Bahamas and FTX.US officials are fighting for hundreds of millions, if not billions, as the latter claims that the Bahamian authorities transferred these assets illicitly.