Binance US’s acquisition of bankrupt Voyager Digital faces opposition from regulators

Binance US is facing stern opposition from the US Securities and Exchange Commission (SEC) and several financial regulators for its acquisition of bankrupt crypto lender Voyager Digital. The SEC questioned the adequacy of the information in Binance US’s disclosure statement and raised concerns over the exchange’s financial ability to go through with the $1 billion acquisition. 

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Binance US faces objections from the SEC and regulators in its acquisition of Voyager

Binance US, a cryptocurrency exchange available to US residents, is in the process of acquiring bankrupt crypto lender Voyager Digital. Regulators like the US Securities and Exchange Commission, the US Trustee and New Jersey and Vermont state regulators have filed a motion asking a judge to halt the acquisition of Voyager. 

Federal and State agencies objected to the possibility that assets could be moved offshore and it would be harder to recover them on behalf of consumers. The SEC has cast doubt on Binance’s ability to go through with the $1.02 billion purchase of the bankrupt firm’s assets. 

In the filing, the SEC questions the adequacy of the information in the exchange’s disclosure statement, specifically on the ability of the crypto exchange to successfully complete the transaction of a high magnitude. The US financial regulator needs details on how the exchange would rebalance its cryptocurrency portfolio.

The regulator shared the concerns with Binance US’s counsel and the legal team said that a revised disclosure statement will be filed prior to the next hearing on the motions

According to the New Jersey Bureau of Securities, Binance will have the freedom to direct the cryptocurrency as it wishes, such that without customer knowledge, the cryptocurrency might wind-up in an offshore (non-US custodial) account, outside the reach of US regulatory and enforcement authorities.

Voyager Digital went into bankruptcy in July 2022 and agreed to sell its assets to the bankrupt exchange FTX, before Binance revealed plans to acquire the lender.