In separate filings, New York Financial Regulators and the United States Securities and Exchange Commission (SEC) have opposed Binance.US’s $1.02 billion takeover deal of Voyager. In the filing, the regulators argued that the deal lacks enough regulatory merits to manifest.
The New York State’s Department of Financial Services (NYDFS) and Attorney General Letitia James established that Voyager failed to register duly before providing digital assets services in the state. Through its filing, the NYDFS indicated that Voyager doesn’t have a regulatory permit in the state.
Additionally, the regulator decried how the deal failed to provide a swift pathway for Voyager’s creditors in New York to reclaim their crypto assets. As revealed, the deal proposes that customers of Voyager in New York will only be able to claim their assets six months after the takeover.
SEC’s argument against the takeover deal
Also, the SEC said the deal upon completion will fall at the other side its regulation. The SEC faulted how the proposed deal intends to service creditors of the bankrupt crypto lender. The regulator illuminated further that the plan to redistribute crypto assets to Voyager’s creditors may violate the prohibition stipulated in Section 5 of the 1993 Securities act.
Worth noting that the SEC’s argument focuses on the VGX coin minted by the crypto lender. In accordance with the aforementioned Securities act, the SEC said the VGX is an unregistered security. Therefore, distributing it to creditors of Voyager is a violation of the SEC’s security act.
More so, the SEC urged Voyager to provide convincing evidence to prove that the proposed deal is in accordance with its regulatory stipulations. Further emphasizing the premise of why the deal is not feasible, the regulator faulted Binance’s involvement in the takeover. The SEC made reference to some reports about how Binance is willing to pay fines for some previous money laundering charges. The SEC stated that the report is a major factor as to why the deal should not materialize.
How Binance and Voyager may incur legal wrath from regulators
Despite the stern opposition from regulators, the takeover deal seems to be on the verge of completion. According to the attorney representing Voyager, Allyson Smith, the deal will manifest soon. While speaking before a New York court yesterday, the attorney revealed that about 97% of Voyager’s creditors have voted in favour of the deal.
Likewise, the deadline for the voting process regarding the takeover has elapsed yesterday. So far, a large percentage of Voyager’s creditors voted in support of the deal. Thus, the takeover could be finalized soon barring any last-minute ditch. Upon completion against the advice of regulators, both Binance and Voyager are likely to incur a lawsuit from the SEC.