Binance.US’s $1 Billion Deal With Voyager Is Blocked By The SEC

Key Points:

• The proposed $1.022 billion acquisition of insolvent crypto lender Voyager Digital by cryptocurrency exchange Binance.US has received a limited objection from the SEC.
• The SEC drew attention to the absence of information on Binance.US’s capacity to finance the acquisition, the operations that would result from the agreement, and the protection of customer funds both during and after the transaction.
• Some critics read the SEC’s opposition as a hint that Binance.US wouldn’t be able to afford the acquisition without engaging in questionable behavior.

The $1.022 billion deal that Binance.US wants to make to acquire the assets of defunct crypto lender Voyager has drawn limited objection from the U.S. Securities and Exchange Commission (SEC).

The limited objection was submitted on January 4, and the SEC cited a lack of information regarding Binance.US’s capacity to finance the acquisition, the nature of the operations after the deal, and the security measures to be taken to protect customer assets both during and after the transaction.

The ability of the cryptocurrency exchange to consummate a transaction of this magnitude, as well as how Binance.US expects to secure customer funds and details on how Binance.US would rebalance its cryptocurrency holdings, were among the informational gaps the SEC raised in its filing.

The agency also requests more information from Voyager regarding what would occur if the acquisition were to not close by April 18.

The lender wants to provide a revised disclosure statement prior to a hearing on the topic, according to the SEC’s filing, which said that it has previously discussed its concerns with Voyager.

The Texas State Securities Board and the Texas Department of Banking separately objected to the offer on the grounds that Voyager and Binance.US are not in conformity with Texas law and are not permitted to conduct business in Texas. The disparate treatment provided to creditors in various states is another issue they have.

According to several critics, the SEC’s concern implied that Binance.US would need to engage in some untoward dealing to finance the acquisition, such as collecting funds from Binance’s worldwide organization.

Prior to declaring bankruptcy earlier this year, Voyager had initially agreed to sell its assets to the now-defunct cryptocurrency exchange FTX, which had prevailed over rivals Wave Financial and Binance to acquire the assets.

On December 19, Voyager revealed that it had accepted Binance.US’s offer to buy its assets in a $1.022 billion agreement.

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