SEC Files Objection To Binance’s $1B Deal To Acquire Voyager Assets• January 9, 2023 7:51 pm • Comments
Based on the records, the SEC has been reported to have filed an objection to Binance.us’s proposal to acquire Voyager Assets for about $1 billion.
The SEC states that they reason why they filed this objection is because they are questioning how Binance is able to perform such a large acquisition deal.
Essentially, it seems that the SEC is just suspicious and is deciding trying to enforce strict regulations within the crypto industry which may affect innovation and growth.
Voyager is also known as a crypto lender that had previously went into bankruptcy earlier in the year and was scheduled to sell this assets to FTX.
However, with the collapse of FTX, this deal is now gone and the only option now is to sell its assets to Binance and other rivals.
SEC basically objecting on the grounds that Binance US couldn’t have this size of assets without some untoward dealing (likely with parentco)
Which would mean a commingling of the US entity. So if Binance fights it they risk US exposure… https://t.co/9wW6eRTol7
— Adam Cochran (adamscochran.eth) (@adamscochran) January 4, 2023
In its filing, the SEC questioned the adequacy of the information in Binance.US’s disclosure statement, specifically details on the ability of the crypto exchange to “consummate a transaction of this magnitude,” as well as how Binance.US intends to secure customer assets and details on how Binance.US would rebalance its cryptocurrency portfolio.
The SEC said it has communicated its concerns to Binance.US’s counsel, and has been told that a revised disclosure statement will be filed prior to the next hearing on the motions.
Voyager plans to seek the approval of the bankruptcy court for the sales of its assets at a hearing on Jan. 5.
Separately, the Texas State Securities Board and the Texas Department of Banking filed an objection to the sale because they claim Voyager and Binance.US are “not in compliance with Texas law and are not authorized to conduct business in Texas.”
They further object to the “disparate treatment provided to creditors in certain states.”
Based on the reports, it seems that the SEC is also hinting in its objection that the only way that Binance could finance this deal is if it had a parent company.
Since Binance.us is a subsidiary of Binance as a whole, this may be a part of the SEC’s plan to be able to regulate the entire Binance company.
This would not be a good idea for Binance and puts the company in a bad spot.
They would either abandon this acquisition deal in order to prevent the company from having to have US exposure and thus have to be regulated by the SEC.
Otherwise, they would have to lose control to the SEC in order to complete this acquisition.
Either option is not ideal but it seems like insulating Binance from US regulators may be more important for the long term growth of the company.
— John Morgan (@johnmorganFL) January 5, 2023
While Binance CEO Changpeng Zhao (CZ) has publicly stated that Binance.US was a “fully independent entity,” an Oct. 17 Reuters report alleged that the U.S. entity acts more like a “de facto subsidiary” which was created to “insulate Binance from U.S. regulators.”
In response to the allegations, CZ suggested in an Oct. 17 blog that Binance was committed to complying with regulators, that the author of the article was reporting in a biased manner and had used a presentation provided by an external consultant which was never implemented as evidence for these claims.
Voyager announced on Dec. 19 that it had agreed to Binance.US’s bid to acquire its assets, in a deal worth $1.022 billion in total.
The lender noted in a press release that the bid was the “highest and best bid for its assets,” which would maximize the value returned to customers and creditors “on an expedited timeframe.”
#Binance The SEC wants to see more information included in the $1.022 billion deal between Binance’s U.S. arm and Voyager Digital before it agrees to the acquisition. Binance, a cryptocurrency exchange, has received a “limited objection” from the… https://t.co/4dn6iSINE7
— Coinscreed (@coinscreed) January 5, 2023
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