SEC files objection to Binance.US’s plans to acquire Voyager Digital

The United States Securities and Exchange Commission (SEC) has filed a “limited objection” to crypto exchange Binance.US proposed $1 billion to buy bankrupt crypto lender Voyager Digital, citing a lack of “information necessary”.

The limited objection was filed on January 4, with the SEC highlighting a lack of detail regarding Binance.US’s ability to finance the acquisition, what Binance.US’s operations would look like after the deal, and how customer assets would be secured during and after the transaction.

A limited objection is similar to a normal objection, but only applies to a certain part of the proceedings.

In addition, the regulator also wants Voyager to provide more details on what would happen if the transaction is not completed by April 18.

In its filing, the SEC said it has already communicated its concerns to Voyager, and the lender intends to file a revised disclosure statement ahead of a hearing on the matter.

Some commentators interpreted the objection as the SEC suggesting that Binance.US would not be able to afford the acquisition without “some improper arrangement” such as receiving funds from Binance’s global entity.

The SEC essentially objects on the grounds that Binance US could not have this size of assets without some dodgy deal (likely with the parent).

Which would mean a mix of the American entity. So if Binance fights it, they risk exposing the US… https://t.co/9wW6eRTol7

— Adam Cochran (@adamscochran.eth) (@adamscochran) January 4, 2023

While Binance CEO Changpeng Zhao (CZ) has publicly stated that Binance.US was a “fully independent entity,” an October 17 Reuters report claimed that the US entity operates more like a “de facto subsidiary” that was created to “isolate Binance”. by US regulators.”

In response, CZ argued in an Oct. 17 blog post that Binance was committed to complying with regulators, that the article’s author was reporting in a biased manner and had used a presentation provided by an outside consultant that was never implemented .

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Voyager announced on December 19 that it had agreed to Binance.US’ offer to buy its assets, in a deal worth $1.022 billion in total.

The lender noted in a press release that the offer was the “highest and best offer for its assets,” which would maximize the value returned to customers and creditors “on an accelerated timeline.”

Voyager announced on September 27 that FTX.US had won the auction for its assets with a $1.4 billion bid, which would have seen customers recover 72% of their frozen crypto, a deal that has since fallen through.