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Texas believes that the restructuring plan appears to discriminate unjustly against Texas-based customers.
A recent court filing has revealed that Texas is moving against the proposed buyout deal between Binance.US and defunct crypto lender Voyager Digital. The motion, which was jointly submitted by the Texas State Securities Board and the Department of Banking, has some reservations about the terms and conditions of the deal.
Recall that in December, Coinspeaker reported that Binance.US has agreed to buy Voyager’s assets for just over $1 billion. However, new revelations show that there might be some inadequacies in the company’s terms of service.
Texas Issues Reservations about Binance.US Terms of Service
According to the court document, Binance.US does not expressly state in the plan that unsecured creditors may only recover between 24 to 26% of their funds. That is, as opposed to the 51% they could receive under Chapter 7.
Furthermore, Texas also notes that Binance.US failed to let account holders know that they will be required to allow their “personally sensitive information” to be transferred to any party in any part of the world. But then, if any issues later arise, the account holders will have no legal rights whatsoever. Part of the objection statement reads:
“If any issues arise in the customers’ access to or use of Binance.US’s services, the customers have absolutely no right to challenge the issue.”
Another major point that the filing highlights is that the plan appears to discriminate unjustly against Texas customers. This is so because Binance.US is not yet licensed to operate in the state. Therefore, digital assets belonging to customers that reside in Texas would have to be held by Voyager. At least, for about six months after the agreement. It is during this time that Binance.US would seek an operational license in the state.
The objection also notes that it is practically impossible for Binance.US to bag the license in such a little time. Therefore, holding on to consumers’ coins for those six months achieves nothing.
More Regulatory Heat for Binance.US
Meanwhile, the filing follows barely a few days after the Securities and Exchange Commission (SEC) submitted a filing of its own to a New York bankruptcy court. The top regulator alleges that some parts of the restructuring plan violate securities law. And for this, it will start investigating Binance.US alongside some other debtors for possible violations of federal securities laws.