Binance.US-Voyager Deal Faces Objections From Texas Authorities

Texas State Securities Board and the Department of Banking have filed objections to a proposed deal between Binance.US and bankrupted crypto lender Voyager Digital. The objections were disclosed in a court filing on February 24.

The filing stated that Binance.US’s terms of service and restructuring plan contained inadequate disclosures, failing to inform unsecured creditors that they may only receive 24%-26% recovery under the plan, as opposed to the 51% they would receive under Chapter 7.

The document claimed that Binance.US’s disclosure statement failed to inform account holders. Binance.US required account holders to allow the transfer of “personally sensitive information” worldwide. Moreover, Binance.US then strips the account holders of any legal recourse for any issues that may arise.

According to the objection, this provision denies customers any right to challenge the issue. Furthermore, someone claimed that the plan unfairly discriminates against Texas consumers.

Since Texas is not a supported jurisdiction by Binance.US, customers in the state would have their digital assets held by Voyager for six months after the agreement, during which time Binance.US would seek to license in the state.

We claim that it would be almost impossible for Binance.us to obtain a license from the Texas SSB and the DOB within six months. As such, holding the Texas consumers’ coin for six months accomplishes nothing.

Shortly after the bankruptcy court in New York received a submission from the SEC, people raised objections. The objections alleged securities law violations in some aspects of the restructuring plan.

The SEC is investigating Binance.US and related debtors for possible anti-fraud, registration, and other violations of federal securities laws. The SEC expressed concerns about the security of assets acquired through the proposed acquisition, among other issues.

In December 2022, Binance.US disclosed an agreement to purchase Voyager’s assets for $1.022 billion. However, the recent objections from Texas and the SEC investigation could potentially delay or derail the proposed deal.

Binance.US Faces Mounting Regulatory Scrutiny

Binance.US’s proposed deal with Voyager Digital is facing mounting regulatory scrutiny, with objections from Texas’ State Securities Board and Department of Banking, as well as a Securities and Exchange Commission (SEC) investigation.

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The objections claimed that Binance.US’s terms of service and restructuring plan contained inadequate disclosures and unfairly discriminated against Texas consumers.

The SEC expressed concerns about the security of assets acquired through the proposed acquisition, among other issues. These regulatory challenges could potentially delay or derail the proposed deal, which was disclosed in December 2022 for $1.022 billion.