The United States Securities and Exchange Commission (SEC) has filed a “limited objection” to crypto exchange Binance.US’s proposed $1 billion takeover of bankrupt crypto lender Voyager Digital, citing a lack of “necessary information.”
The limit objection was filed on Jan. 4, with the SEC pointing to a lack of detail regarding Binance.US’s ability to fund the acquisition, what Binance.US’s operations would look like following the deal, and how customer assets will be secured during and after the transaction.
A limited objection is similar in nature to a regular objection, but it only applies to part of the proceedings.
Voyager must also provide additional information about what to do if the transaction does not go through by April 18.
The SEC stated in its filing that it had already communicated concerns to Voyager, and that the lender will file a revised disclosure statement before a hearing on this matter.
Some commentators interpreted the objection as the SEC suggesting Binance.US would not be able to afford the acquisition without “some untoward dealing” such as receiving funds from Binance’s 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)
That would lead to a commingling with the US entity. So if Binance fights it they risk US exposure… https://t.co/9wW6eRTol7
— Adam Cochran (adamscochran.eth) (@adamscochran) January 4, 2023
While Binance CEO Changpeng Zhao (CZ) has publicly stated that Binance.US was a “fully independent entity,” an Oct. 17 Reuters report alleged that the U.S. entity acts more like a “de facto subsidiary” that was created to “insulate Binance from U.S. regulators.”
In responseCZ claimed in an Oct. 17 blog that Binance was committed in complying with regulators. However, the author of the article had reported in a biased fashion and used an external consultant’s presentation that was never implemented.
Related: ‘Binance is the crypto market:’ Arcane crowns the exchange 2022’s winner
Voyager announced on Dec. 19 that it had agreed to Binance.US’s bid to acquire its assets, in a deal worth $1.022 billion in total.
The lender noted in a press release that the bid was the “highest and best bid for its assets,” which would maximize the value returned to customers and creditors “on an expedited timeframe.”
Voyager announced that FTX.US won the auction for assets on Sept. 27, with an offer of $1.4 Billion. This would have allowed customers to recover 72% of their crypto frozen, a deal which has since been cancelled.