A US judge has criticized the objections raised by the Securities and Exchange Commission (SEC) in relation to a deal between cryptocurrency firms Voyager Digital Ltd and Binance.US. The SEC had raised concerns about Voyager’s plans to acquire the US business of Binance, citing Binance’s lack of registration with the regulator. The judge, however, suggested that the objections were based on “sophistry,” and noted that the regulator had not raised similar concerns in relation to other deals.
However, the SEC raised objections to the deal , arguing that Binance was operating in the US without the necessary regulatory approvals.
The judge’s criticism of the SEC’s objections may boost Voyager’s case, although it remains to be seen how the lawsuit will ultimately be resolved. In the meantime, Voyager has continued to expand its operations, with the firm recently launching its own decentralized exchange (DEX) platform. The DEX allows users to trade cryptocurrencies directly with one another, without the need for an intermediary.
Voyager has recently entered into an agreement with Binance.US, wherein Binance.US will acquire Voyager’s assets. As per the agreement, Binance.US has agreed to provide a good faith deposit of $10 million and reimburse Voyager for certain expenses, up to a maximum of $15 million. However, if the deal does not close by April 18, 2023 (with a possible one-month extension), Voyager will be allowed to promptly return value to its customers.
Voyager’s Chapter 11 restructuring plan has come under scrutiny from various government entities. The SEC is the latest to investigate the matter, but they’re not alone. The U.S. Attorney for the Southern District of New York, Damian Williams, has called the plan “blatantly illegal” and the state securities regulator in New Jersey has supported Williams’s objection.
The banking and securities regulators in Texas have also taken issue with Voyager’s lack of transparency regarding the potential drop in payout for unsecured creditors. According to estimates, the creditors could receive only 24% of the value of their assets instead of the previously estimated 51%, if the company loses its lawsuit against Alameda Research.
Alameda Research sued Voyager in January for $446 million in loans repaid to Voyager Digital. The lawsuit alleges that Voyager and other crypto lenders “funded Alameda and fueled [its] alleged misconduct, either knowingly or recklessly.” Alameda’s lawyers argue that the money should be used to repay their creditors, not Voyager’s, and that it is recoverable.
Conclusion
With US Judge ruling the SEC objection to Binance -Voyager deal as Invalid, it gives hope for Voyager customers who lost their assets and so is Binance who can set their foot in the US in big way. This also will give Coinbase a competition because there aren’t any trustworthy players in the crypto space after the FTX meltdown with the United States.
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