US judge slams SEC for objecting to Voyager Digital’s deal with Binance.
A US judge has opposed actions by the SEC to block the deal between crypto lender Voyager Digital and crypto company Binance. In December 2022, Voyager announced that it had selected Binance.US as the best and highest bidder for its assets. The deal is worth $1.022 billion and is set to help the crypto lender’s customers access their funds sooner. Under the agreement, the US branch of the crypto exchange was to make a goodwill deposit of $10 million, while it reimbursed Voyager for specific expenses of up to $15 million. After that, all assets and customers of the lender will be transferred to Binance. However, the success of the deal is subject to approval from a bankruptcy court, the SEC and the Committee on Foreign Investment in the United States (CFIUS).
Voyager’s Challenges began in July 2022 with an approach to the now-defunct hedge fund Three Arrows Capital. It initially suspended withdrawals prior to the bankruptcy filing as a result of liquidity issues. Last week, a representative attorney for Voyager Digital said plans to complete the deal with Binance were on track. According to the lawyers, 97% of the votes in the case are in favor, which means that the bid may ultimately be successful. Nevertheless, the SEC has a tight grip on the deal between Voyager and Binance, noting:
“Transactions in crypto assets required to effect rebalancing, redistribution of such assets to account holders, may violate the prohibition in Section 5 of the Securities Act of 1993 against unregistered offer, sale or distribution of securities after sale” The burden is on the debtors to produce credible evidence that the provisions of the plan are enforceable and are not in violation of applicable law.
US Judge Questions SEC for Going Against Voyager Deal with Binance
According to court filings, the SEC raised concerns about Voyager Digital and Binance. It said that the crypto lender cannot prove that the deal with Binance or other crypto transactions complies with US securities law.
Binance’s bid to buy Voyager is facing roadblocks, but the latest update is the SEC’s response to a judge casting vague doubts about the proposed sale. Judge Michael Wiles said Thursday that the commission requested to suspend the bid without a precise explanation.
In addition, SEC counsel William Uptegrove did not provide specifics on whether the commission believes the sale violated US securities laws. Rather he replied:
“We cannot take a position on this point. The SEC is a deliberative body, and its process is a nonpublic one by federal law.”
The judge, however, seemed unimpressed with Uptegrove’s response. He insisted that lawyers provide specific information “if there are reasons to be concerned.”
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Ibukun is a crypto/finance writer interested in delivering relevant information using non-complicated words to reach all types of audiences. Apart from writing, she enjoys watching movies, cooking and exploring restaurants in the city of Lagos where she lives.
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