SEC Investigates Binance US Acquisition of Voyager Digital Assets

The collapsed crypto exchange FTX had initially planned to acquire the assets of Voyager Digital, a crypto lending platform. However, due to FTX’s bankruptcy, the acquisition did not materialize. Subsequently, the bid was reopened, and Binance US, the US arm of the world’s largest crypto exchange, stepped in to purchase Voyager Digital’s assets for a sum exceeding $1 billion.

According to a Reuters report, the United States Securities and Exchange Commission (SEC) has raised concerns and initiated an investigation into the acquisition. The SEC is particularly cautious about the involvement of the largest crypto exchange, Binance US, and has expressed reservations regarding the deal. In a bankruptcy court filing, the regulator highlighted Binance US’s failure to include essential information in its disclosure statement.

Furthermore, the SEC is seeking additional details about the purchase agreement and has questioned Binance US’s capacity to acquire Voyager Digital’s assets. This skepticism stems from FTX’s prior unsuccessful attempt to purchase the crypto lender’s assets, attributed to liquidity issues, which the authorities were previously unaware of.

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Additionally, the Reuters report indicates that the SEC has raised questions about the post-deal business operations of the company involved. The US regulators have requested the judge to halt the deal until Binance US discloses its financial information and clarifies its corporate relationship with the larger crypto exchange, led by Changpeng Zhao, also known as CZ in the crypto community.

It is important to note that various regulatory bodies, including the SEC, the U.S. Trustee within the Justice Department, and state regulators from New Jersey and Vermont, have filed motions objecting to the deal. The SEC has argued that the current disclosures provided for the purchase lack necessary information.

Moreover, the New Jersey Bureau of Securities has expressed concerns about the transfer of coins to Binance US, fearing that the cryptocurrency could be directed to an offshore account outside the jurisdiction of U.S. regulatory authorities, without customer knowledge.

These concerns about the location of funds have been amplified following the collapse of FTX under the leadership of Sam Bankman-Fried (SBF) and allegations that SBF collaborated with foreign regulators to transfer assets that FTX’s U.S. arm was attempting to recover through Chapter 11 bankruptcy proceedings. The regulators in the Bahamas and FTX.US officials are currently engaged in a legal dispute, with the latter claiming that the Bahamian authorities illicitly transferred these assets, involving hundreds of millions, if not billions of dollars.