SEC Puts Objection to Binance.US $1 Billion Acquisition Deal for Voyager Assets

UTC by Bhushan Akolkar · 3 min read
SEC Puts Objection to Binance.US $1 Billion Acquisition Deal for Voyager Assets
Photo: Depositphotos

The SEC wants to know how Binance.US is going to facilitate such a huge transaction.

Last month, Binance.US proposed a $1 billion acquisition deal to get its hands on the assets of bankrupt crypto lender Voyager Digital. Although Voyager was ok with proceeding with the deal, the US Securities and Exchange Commission (SEC) has now come in the way. On Wednesday, January 4, the SEC filed a limited objection over the acquisition while questioning the adequacy of the information furnished by Binance.US in its disclosure statement. The SEC has specifically pointed out the details of the ability of Binance.US to “consummate a transaction of this magnitude”.

SEC vs Binance.US

Furthermore, it also wants to know how the crypto exchange is going to secure customer assets and how it would rebalance its cryptocurrency portfolio. The securities regulator further noted that they have communicated their concerns to the binance.US’s counsel. The crypto exchange stated that they would be filing a revised disclosure statement ahead of the next hearing on the motions.

A limited injection is similar to the normal objection, however, applies only to a specific part of the proceedings. Interpreting the SEC’s objections, some commentators stated that the securities regulator is suggesting that Binance.US won’t be able to afford this acquisition without “some untoward dealing” such as receiving funds from the global Binance entity. The former head of Growth at DCG, Adam Cochran explains:

“SEC basically objecting on the grounds that Binance US couldn’t have this size of assets without some untoward dealing (likely with parentco) Which would mean a commingling of the US entity. So if Binance fights it they risk US exposure”.

Previously, Binance CEO Changpeng Zhao clarified that Binance.US is a fully independent entity.

Voyager Seeks Approval from Court

Troubled crypto lender Voyager Digital is now seeking the approval of the bankruptcy court to sell its assets. Voyager will make the request during a court hearing later today, on January 5.

In another development, the Texas Department of Banking and the Texas State Securities Board has filed an objection to the sale claiming that Binance.US and Voyager Digital are “not in compliance with Texas law and are not authorized to conduct business in Texas”. They have also objected to the “disparate treatment provided to creditors in certain states.”

As said, Voyager Digital had agreed to sell its assets in a deal worth $1.022 billion in total. The troubled crypto lender said that the bid by Binance was the “highest and best bid for its assets,” which would maximize the value returned to customers and creditors “on an expedited timeframe.”

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