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Vladimir Myronenko
The Securities and Exchange Commission (SEC) and the New York City Department of Financial Services (NYDFS) have opposed a $1.02 billion acquisition of the assets of bankrupt cryptocurrency broker Voyager by the US arm of the Binance crypto exchange. The deal, according to Binance.US, will release some of the funds frozen in the accounts of the insolvent firm.
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Regulators challenged Binance.US’ decision in court last Wednesday, citing arguments explaining why they consider the deal illegal.
The SEC contends that transactions required to reallocate assets owned by Voyager customers may violate a ban on the sale or offer of unregistered securities. The SEC also stated that Binance.US could be considered an unregistered national securities exchange. In addition, the commission was not satisfied with the explanations of Binance.US about whether third parties, “including Binance.US affiliates, foreign representatives or organizations”, have access to customer wallets.
In turn, NYDFS indicated in the lawsuit that Voyager worked in the state “illegal”without a license and “lichen” New York clients of consumer protection provided by the state regulator. The regulator also noted that since Binance.US is not licensed and not available in New York, Voyager customers in the state may have to wait longer than out-of-state customers to access their funds.
In addition, the deal is also being reviewed by the US Committee on Foreign Investment (Cfius), which reviews transactions involving foreign investment in the country for potential national security risks.
