Binance.US’s $1B Voyager Deal Challenged by SEC

Binance.US’s planned acquisition of defunct crypto lender Voyager’s assets has been opposed by both New York and Federal finance regulators. The $1.02 billion deal could prove discriminatory and unlawful, said the regulators in filings submitted on Feb. 22.


Binance.US-Voyager Deal Probe

The Securities and Exchange Commission (SEC) has been increasing its interventions into the crypto space, with recent probes into alleged sales of unregistered securities causing crypto exchange Kraken to shutter its crypto staking operations. The SEC said that certain elements of the proposed Binance.US-Voyager deal may infringe the law, particularly in relation to the repaying of Voyager’s former customers. It stated that “the transactions in crypto assets necessary to effectuate the rebalancing, the redistribution of such assets to Account Holders, may violate the prohibition in Section 5 of the Securities Act of 1933 against the unregistered offer, sale, or delivery after sale of securities,” citing the VGX token issued by Voyager.

The deal has also been opposed by the New York State Department of Financial Services (NYDFS) and Attorney General Letitia James. The regulators alleged that Voyager had unlawfully served customers in the state and had operated a virtual currency business without a license, depriving its customers of protection. NYDFS said that the plan discriminates against New Yorkers who won’t be able to reclaim their crypto for six months while Binance.US gains approval in the state.


Regulatory Opposition

In January, the SEC filed a limited objection to the deal, saying there wasn’t enough detail to show that Binance.US could afford it. The Federal Trade Commission is also said to be probing Voyager for deceptive marketing. Voyager creditors had until 16:00 Eastern Time on Wednesday to approve the deal, and the company’s counsel stated that the vast majority had done so, despite the regulatory opposition.

Voyager had previously argued that the Binance.US deal offered the best possible outcome for creditors and that NYDFS objections were hypocritical because the regulators themselves were limiting the ability to distribute crypto. However, with regulators opposing the deal, it remains to be seen what the next steps will be for both Binance.US and Voyager.