The United States Securities and Exchange Commission (SEC) has filed a “limited objection” to the proposed $1 billion acquisition of crypto exchange Binance.US from bankrupt cryptocurrency lender Voyager Digital, due to a lack of “necessary information”.
The limited objection was filed on January 4; The SEC noted the lack of details about Binance.US’s ability to finance the acquisition, what Binance.US’s operations would look like after the deal, and how client assets will be secured during and after the transaction.
A limited objection is similar to a normal objection, but it only applies to a specific part of the proceeding.
Besides, The regulator also wants Voyager to provide more details about what would happen if the transaction is not consummated by April 18.
In his presentation, The SEC said it had already communicated its concerns to Voyager and that the lender intends to file a revised disclosure statement before a hearing on the matter.
Some commentators interpreted the objection as the SEC suggesting that Binance.US could not afford the acquisition without “some inconvenient deal,” How to receive funds from the Binance global entity.
SEC basically objecting on the grounds that Binance US couldn’t have this size of assets without some untoward dealing (likely with parentco)
Which would mean a commingling of the US entity. So if Binance fights it they risk US exposure… https://t.co/9wW6eRTol7
—Adam Cochran (adamscochran.eth) (@adamscochran) January 4, 2023
The SEC basically objects on the grounds that Binance US could not have that many assets without some improper deal (probably with the parent company). Which would mean a mix of the US entity. So if Binance objects they risk US exposure…
For his part, Binance CEO Changpeng Zhao (CZ) has publicly stated that Binance.US was a “totally independent entity”. A Reuters report on October 17 alleged that the US entity acts more like a “de facto subsidiary” which was created to “insulate Binance from US regulators.”
In response, CZ argued in an Oct. 17 blog post that Binance was committed to complying with regulators, that the author of the article was reporting biasedly and had used a presentation provided by an external consultant that was never implemented.
Voyager announced on December 19 that it had accepted Binance.US’s offer to acquire its assets, in an operation for a total value of USD 1,022 million.
The lender said 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 “in an accelerated time frame.”
Voyager announced on September 27 that FTX.US had won the auction for its assets with a bid of $1.4 billion, with which clients would have recovered 72% of their frozen cryptocurrencies, but this deal did not close due to bankruptcy. from FTX.
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