Court Rules In Favor Of Binance.US To Acquire Voyager Digital Despite SEC Objection

March 8, 2023 2:20 pm Comments

It looks like the bankruptcy court just ruled in favor of Binance.US to allow it to acquire Voyager Digital’s assets in a deal worth more than $1 billion.

This was able to happen despite the SEC’s objection to the deal where the SEC had accused Binance.US of being an unregistered exchange.

As a result, this is a very positive development for the crypto industry as it indicates that the SEC does not always gets its way when it comes to its enforcement actions.

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With that being said, there are still a few regulatory processes that the company needs to go through before the deal can actually be finalized.

Voyager’s VGX token surged by over 8% after the news was announced as it was not expected that the SEC’s objection would be overruled by the court.

CoinDesk reports:

The hearing, which began Thursday, also gave various parties and regulators a chance to object to the proposed sale. The judge ultimately ruled that many of these objections either did not make a strong argument or that they would have unnecessarily bogged down proceedings.

“If the government wants to litigate that” Voyager’s sale of VGX tokens was an offering of securities, it should have done so, he said, referring to an SEC attorney’s statement that the proposed sale may have securities law tie-ups.

However, the regulators did not choose to do so; based on the evidence provided during the hearing, Wiles would have had “no choice” but to rule that the transactions were perfectly legal, he added.

Other concerns raised by parties included the possibility that Voyager customer data, including Social Security numbers, would be shared with Binance.US and may be stored in offshore databases. An attorney representing Binance.US said no Binance.US employees would have access to this type of information.

The SEC has also been continuing with its aggressive agenda that declares many digital assets as unregistered securities.

For example, the SEC said that it believed that the Voyager’s VGX token was an unregistered security in the same way as XRP.

This may be one of the primary reasons for why the SEC had objected to the deal in the first place.

However, the judge had stated that the SEC staff “believing” that was not enough evidence to stop the deal as an official position would have to actually take place where the agency tries to charge them for violating securities laws.

As a result, the SEC was not able to come up with any better argument which sets a positive precedent for any other future accusations where a digital asset is declared a security.

DeCrypto.co reports:

Voyager’s restructuring plan includes legal protections for the company, and the SEC wanted to maintain its ability to later file charges against the company. The judge gave the SEC until today to come up with a better argument but was evidently unimpressed.

Crypto broker Voyager went bust last July after revealing it had massive exposure to failed crypto hedge fund Three Arrows Capital.

The firm now has since been working out how to return assets to investors who had its services. Voyager struck a deal with FTX in September of last year for the exchange to buy its distressed assets—but that was before FTX itself went bankrupt and its founder Sam Bankman-Fried was charged with a dozen financial crimes.

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