• 17 July, 2024
News

Binance.US’s $1.02 Billion Deal to Purchase Voyager Assets Faces Opposition from Regulators

Binance.US’s $1.02 billion deal to purchase the assets of defunct cryptocurrency lender Voyager is facing opposition from regulators. Both New York State’s Department of Financial Services (NYDFS) and the Securities and Exchange Commission (SEC) have opposed the deal, citing potential discriminatory and unlawful practices.

The SEC’s filing on Feb. 22 claimed that the deal may infringe the law, especially regarding how the plan intends to repay Voyager’s former customers. The regulator also warned that certain elements of the proposed deal could violate Section 5 of the Securities Act of 1933. 

According to the SEC, 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

Meanwhile, the NYDFS filing alleges that Voyager had illegally operated a virtual currency business within the state without a license, depriving its customers of protection. The plan is also believed to discriminate against New Yorkers who will be unable to reclaim their crypto for six months while Binance.US gains approval in the state.

The SEC had previously filed a limited objection to the deal in January, claiming that there wasn’t enough detail to show that Binance.US could afford it. The Federal Trade Commission is also probing Voyager for deceptive marketing.

Despite these objections, Voyager has argued that the Binance.US deal offers the best possible outcome for creditors. The company’s counsel has said that, with a few hours of voting left, the vast majority of creditors had approved the deal before the Wednesday deadline.

This opposition comes at a time when the SEC has been increasing its interventions into cryptocurrency, with recent probes into alleged sales of unregistered securities causing crypto exchange Kraken to shut down its crypto staking operations.

Additionally, media reports suggest that Binance is preparing to pay penalties for past infractions of money laundering and corruption law, raising further concerns about the feasibility of the deal.

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