US Judge Accuses SEC of Disputing Voyager Digital’s Deal with Binance.
A US judge has challenged the SEC’s action against a deal between crypto lender Voyager Digital and crypto firm Binance. Voyager, December 2022 announced Selecting Binance.US as the best and highest bid for the asset. The deal is valued at $1.022 billion and is set to allow clients of crypto lenders to access their funds as quickly as possible. It was supposed to deposit in good faith and reimburse Voyager for certain expenses up to $15 million. All of the lender’s assets and customers are then transferred to Binance. However, the transaction is subject to bankruptcy court, SEC, and Committee on Foreign Investment in the United States (CFIUS) approvals for success.
Voyager’s challenge began in July 2022 due to its exposure to the now-defunct hedge fund Three Arrows Capital. It initially suspended withdrawals before filing for bankruptcy as a result of liquidity issues. Voyager Digital’s lead lawyer said last week that plans to finalize a deal with Binance are on track. With 97% of the votes in favor, the bid may ultimately be successful, according to lawyers. Still, the SEC has a firm grip on the agreement between Voyager and Binance, stating:
“The trading of crypto-assets necessary to achieve a rebalancing, which is the redistribution of such assets to account holders, is subject to the 1993 rules for unregistered offers, sales, or post-sale deliveries of securities. It may violate the prohibitions of Section 5 of the Securities Act.It is the debtor’s responsibility to present credible evidence that the provisions of the Plan are enforceable and do not violate applicable law.”
US Judge Questions SEC for Opposing Binance-Voyager Deal
The SEC has raised concerns about Voyager Digital and Binance, according to court filings. Cryptocurrency lenders have said they cannot prove that their transactions with Binance or other cryptocurrency transactions comply with U.S. securities laws.
Binance’s bid to buy Voyager faces obstacles, but the latest update is a judge’s response to the SEC’s vague question about the proposed sale. Judge Michael Wiles said Thursday that the commission requested that the bid be suspended without a precise explanation.
Additionally, SEC attorney William Uptegrove did not provide specific information on whether the Commission believes the sale violated US securities laws. Rather he replied:
“Positions cannot be taken at this time. The SEC is a deliberative body and its process is confidential under federal law.”
However, the judge seemed unhappy with Uptegrove’s response. He insisted that lawyers provide specific information “if they have reason to be concerned.”
Ibukun is a cryptocurrency/finance writer interested in communicating information to all kinds of audiences using uncomplicated language. Apart from her writing, she likes watching movies, cooking and exploring restaurants in her city of Lagos.