Regulators Oppose Binance.US $1.02 Billion Deal to Buy Voyager Assets – Coinpedia Fintech News

Binance.US, a cryptocurrency exchange, is facing opposition from regulators over its $1.02 billion deal to purchase assets of defunct crypto lender Voyager. The Securities and Exchange Commission (SEC) and New York’s Department of Financial Services (NYDFS) have filed objections to the deal, citing concerns about its legality and discriminatory nature.

SEC Concerns about the Deal’s Legality

The SEC claims that the proposed deal may violate securities laws. It involves rebalancing and redistributing Voyager’s assets to account holders, which the SEC says could potentially violate the prohibition in Section 5 of the Securities Act of 1933 against the unregistered offer, sale, or delivery after sale of securities. The SEC cites the VGX token issued by Voyager in particular.

NYDFS Allegations against Voyager

The NYDFS alleges that Voyager operated illegally in New York, depriving customers of protection. The agency claims that Voyager onboarded New York customers and thus illegally operated a virtual currency business within the state without a license, in violation of New York laws and regulations. The plan also discriminates against New Yorkers who will not be able to reclaim their crypto for six months while Binance.US gains approval in the state, NYDFS said.

Regulatory Scrutiny of the Crypto Industry

The opposition follows increasing scrutiny of the crypto industry by regulators. The SEC has been investigating the alleged sales of unregistered securities, which caused crypto exchange Kraken to shutter its staking operations. The Federal Trade Commission is also reportedly probing Voyager for deceptive marketing. In addition, media reports suggest that Binance.US may face penalties for past money laundering and corruption infractions.

Uncertain Outcome of the Deal

Voyager creditors had until February 23 to approve the deal, and the company’s counsel has said that the vast majority have done so. However, the objections from regulators may jeopardize the deal’s feasibility. Voyager had argued that the Binance.US deal offers the best outcome for creditors and criticized NYDFS’s objections as hypocritical. The outcome of the deal remains uncertain.

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