The U.S. Securities and Exchange Commission (SEC) is refusing to approve the proposal of crypto exchange Binance’s US subsidiary to acquire more than $1 billion worth of assets owned by bankrupt crypto firm Voyager.
In a filing with the U.S. Bankruptcy Court Southern District of New York, the securities regulator claims that Voyager’s disclosure statement – a requirement in chapter 11 cases and Asset Purchase Agreement (APA) is missing some necessary information.
The SEC says that the APA does not include information on the ability of Binance US to complete the $1.022 billion transaction and the nature of Binance US’ business operations following the acquisition.
The documents also fail to give enough information on how customers’ assets will be protected.
“Sufficient detail regarding how the Debtors intend to secure customer assets, including what if any safeguards will be implemented to protect against theft or loss by both the Debtors, during the implementation of the plan process, and Binance US, after its acquisition of assets.”
The SEC says the disclosure statement neither provides adequate detail on rebalancing Voyager’s cryptocurrency portfolio.
“In addition, the Disclosure Statement should be revised to make clear that rebalancing will occur not just in a liquidation scenario but also in the context of a sale transaction.”
Voyager revealed that Binance US was the highest bidder for its assets in December. Subject to approval by the bankruptcy court, the firm plans to conclude the agreement in April.
“Binance.US intends to put down a $10 million deposit and reimburse Voyager for unspecified expenses up to $15 million with the expectation of closing the deal by April 18, 2023, per Voyager.”
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