U.S. Government Demands Halt to Voyager-Binance.US' $1 Billion Deal – Here's Why
Plans by Binance.US to acquire the assets of Voyager Digital, a collapsed cryptocurrency brokerage, have hit a snag following a demand by the US government to put the proposed deal on hold.
According to court filings, both the Securities and Exchange Commission (SEC) and New York's financial regulator have raised objections to the $1 billion transaction, citing multiple concerns.
The SEC said the Voyager deal might violate laws on the unregistered offer and sale of securities.
More specifically, the agency said the transactions in crypto assets necessary to effectuate the rebalancing "may violate the prohibition in Section 5 of the Securities Act of 1933 against the unregistered offer, sale, or delivery after sale of securities."
The SEC's objection also cited reports of U.S. investigations into Binance.US and the global Binance crypto exchange, of which Binance.US is a purportedly independent partner. "Regulatory actions" could mean the deal may become "impossible to consummate," it said.
Similarly, New York's top financial regulator and New York Attorney General Letitia James objected to the deal, saying that Voyager "illegally operated a virtual currency business within the state without a license."
The regulator also mentioned that since Binance.US isn’t licensed or available in New York, Voyager customers based in the state may have to wait as much as six months to gain access to their funds.
“New York Account Holders will have no ability to control the assets in their accounts, including whether to sell the cryptocurrency to avoid further risk in the volatile cryptocurrency market,” the NYDFS said, adding:
“In contrast, Account Holders in jurisdictions other than Unsupported Jurisdictions (‘Supported Jurisdictions’)
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