SEC opposes Binance.US offer for Voyager assets

The SEC has voted to block the final approval of Binance.US, The company's $1 billion offer for the assets of Voyager Digital, a bankrupt company that lends crypto. Voyager Digital, The USA Securities and Exchange Commission (SEC) has objected to Binance.US's plan to purchase more thanone billion worth of assets of the now Voyager Digital, a defunct crypto lending company. Voyager Digital.

According to a February. 22 filing submitted in USA Bankruptcy Court for the Southern District of NewYork, the SEC believes that certain aspects of the plan for restructuring assets of Binance.US The acquisition may violate securities law.

The SEC is investigating to determine if Binance.US and its debtors have violated registration, anti-fraud as well as other requirements of Federal Securities Laws. The SEC has expressed concern over protecting the assets in the acquisition plan.

The SEC contends that the information in the proposed acquisition of Voyager assets does not adequately define the extent to which Binance.US or other affiliated third parties can access customers' wallets or control those who have access to these wallets.

Additionally, the filing mentions the absence of security measures to ensure that customers' assets are not transferred from the Binance.US platform. The SEC further asserts that Binance.US does not have a formal declaration of internal controls and procedures to ensure the security of customers' assets.

The SEC is urging Binance.US to resolve these issues by providing details about who has access to the customer's assets and the appropriate controls when the deal is completed.

The SEC mostly focuses on a portion of Binance.US' initial plans and its disclosure statement for their Voyager bid. Binance.US will continue to have the option of selling cryptocurrencies that belong to Voyager to give account holders. This is the primary area of interest to authorities from the U.S. regulator."However, its important to note that the Debtors (Binance.US) are yet to prove that they are capable of conducting such sales in accordance with Federal Securities Laws."

According to the SEC filing, a variety of cryptocurrency transactions must be conducted to balance the funds to redistribute them to account holders. This, the SEC believes, could violate the specific provisions of the Securities Act.

The regulator believes that the disclosure document provided to Binance.US and other creditors doesn't discuss the possibility that these transactions could be illegal. This could affect estimates of 51% of the funds paid to Voyager customers and those who claim.

A footnote in the filing discusses the possibility of Voyager purchasing and selling digital assets to balance the portfolio. The SEC is concerned about the possible sale of Voyager Token (VGX), issued by Voyager, that "may constitute unregistered offer or sale of securities under US federal law."

SEC is also aware that Binance.US may act as an exchange by the existing Exchange Act laws, which is illegal without registration as an exchange that is a national securities exchange or exemption from doing so.

The filing raises concerns about the legality and capability to execute the planned restructuring of assets through the acquisition. It also raises doubts about whether Voyager creditors can recoup some of their assets in the event of bankruptcy of the company:

"Creditors & stakeholders are entitled to know whether this transaction provides them meaningful economic benefit whether it is just a $20 million sale of Voyager's customer list to Binance.US."

As its revealed, Binance is looking to solve previous law enforcement and regulatory investigation across the U.S. The company may be fined due to compliance issues raised previously.

Binance is also negotiating regulatory actions about Paxos and is responsible for distributing Binance's U.S. dollar-backed Binance USD.

BUSD $1.00 stablecoin. It was announced that the NewYork Department of Financial Services directed the company to stop producing BUSD tokens beginning February. 21. Paxos has denied claims by that the SEC the BUSD can be considered a security following receiving a Wells notification from the regulator over its failure to declare the token an investment within the U.S.