Texas authorities reject Binance.US’s $1 billion takeover of Voyager Digital

The Texas State Securities Board and Department of Banking have filed an objection to the proposed deal between Binance.US and bankrupt crypto lender Voyager Digital, according to a recent court filing on February 24th. The document highlights that Binance.US’s terms of service and restructuring plan contain insufficient disclosures which fail to inform unsecured creditors adequately that under the plan, they could only be entitled to receive 24%-26% of what would be owed to them under Chapter 7. Binance.US had previously announced an agreement in December 2022 to purchase Voyager’s assets for $1.022 billion.

The filing also states that Binance.US’s disclosure statement does not make customers aware that they must allow their personal sensitive information to be transferred to third parties around the world, with no legal recourse in case of any issues arising from this transfer. According to the objection, “customers’ information can be shared with virtually anyone or any company that Binance.US wishes, and if any problems arise with the customers’ access to or use of Binance.US’s services, they have no way to contest it.”

Further, the document claims that the plan “unfairly discriminates against Texas consumers.” Since Binance.US does not support customers in Texas, their digital assets would be held by Voyager for six months following the agreement, while Binance.US seeks to obtain licensing within this state. However, according to the objection filed: “It is highly unlikely that Binance.US will receive the necessary licensing from the Texas State Securities Board and Department of Banking within six months, thus rendering the holding period for these customers’ coins to be ineffective.”

The Securities and Exchange Commission (SEC) recently filed a complaint with a bankruptcy court in New York, alleging that some aspects of Binance.US’ restructuring plan violated federal securities laws. This filing came shortly after the SEC investigated potential anti-fraud, registration, and other violations by Binance.US and related debtors. In the filing, SEC questioned the security of the assets obtained through the proposed acquisition, among other issues.