New York regulators oppose Binance.US billion-dollar acquisition of Voyager’s assets
New York regulators oppose Binance.US's billion-dollar acquisition of Voyager's assets
- Federal and New York regulatory agencies disagree with Voyager’s billion-dollar VGX token deal, believing it may be illegal and discriminatory.
- The SEC also noted that the plan to reimburse Voyager’s former customers might breach Section 5 of the Securities Act of 1933.
Binance.US’s proposed $1.02 billion purchase of assets from defunct crypto lender Voyager has been met with opposition from New York and Federal finance regulators. In a February 22 filing, they argued the deal might violate discrimination and unlawful laws. This follows recent SEC investigations into unregistered securities sales that caused Kraken to cease its crypto-staking operations.
The SEC also noted that the plan to reimburse Voyager’s former customers might breach Section 5 of the Securities Act of 1933, which prohibits unregistered offer, sale, or delivery after the sale of securities – in particular, the VGX token issued by Voyager. Furthermore, they said it is up to the Debtors to provide reliable evidence that the plan is not in violation of the law. Moreover, reports suggest Binance may face penalties for violating money laundering and corruption laws – making the proposed deal “unfeasible” or even “impossible to consummate.”
The Department of Financial Services (NYDFS) and New York State Attorney General Letitia James opposed the deal in two Feb. 22 filings, alleging that Voyager was unlawfully serving customers in the state by onboarding them without a license, thereby depriving them of protection.
The SEC also raised a limited objection to the plan due to the lack of detail on Binance.US’ ability to afford it, while the FTC has indicated that it is probing Voyager for deceptive marketing. Despite this, Voyager argued that the Binance.US deal offered the best possible outcome for creditors and criticized NYDFS’ objections as “hypocritical,” as they themselves were limiting crypto distribution. Creditors had until 16:00 Eastern Time on Wednesday to approve the deal, with the company’s counsel saying that with a few hours of voting left, the vast majority had already done so.
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Damilola Lawrence
Damilola Lawrence has covered news on crypto markets and tech for over 5 years. He has previously shared crypto insights and analysis for TheShibMagazine, CryptoMode, Qweens Magazine, and The Recording Academy before pivoting into Web3. At Cryptopolitan, he is a crypto price prediction specialist. After finishing a bachelor’s degree, he has segued into a master’s degree in IT Cybersecurity at Maria Curie-Skłodowska University.
