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Binance US is one step closer to snapping up Voyager Digital’s assets after a bankruptcy judge today approved the process—SEC objections be damned.
Bankrupt crypto broker Voyager had a deal to sell its distressed assets to Binance US. The idea now is that Binance US will then handle returning money to the company’s customers.
Binance US is the American affiliate of Binance, the world’s largest crypto exchange. It caters to U.S. customers but claims that it is run independently from Binance. Those claims, however, have been repeatedly called into question, including within Voyager’s bankruptcy process.
The U.S. Securities and Exchange Commission initially filed an objection to the deal in early January, asking for more details regarding the financial viability of Binance US’s business.
It was far from the only regulatory agency to do so.
The Federal Trade Commission, and Texas regulators the Texas State Securities Board and the Texas Department of Banking also filed their own objections to the deal on various grounds. The U.S. Attorney for the Southern District of New York Damian Williams more recently called it “blatantly illegal” to seek legal protection from possible civil or criminal fraud charges; the state securities regulator in New Jersey said it supported this objection.
In late February, the SEC added that it believed Voyager’s VGX token may be an unregistered security. The regulator also said that the transactions to return assets to U.S. customers “may violate” its rules against the sale of unregistered securities, thereby calling Binance US an unregistered securities exchange.
But Judge Michael Wiles was unconvinced with the SEC’s objection, largely because the SEC would not take an official position on the matter and only commit to saying that staff at the Commission “believed” Voyager and Binance US may be violating securities laws.
Voyager’s restructuring plan includes legal protections for the company, and the SEC wanted to maintain its ability to later file charges against the company. The judge gave the SEC until today to come up with a better argument but was evidently unimpressed.
Crypto broker Voyager went bust last July after revealing it had massive exposure to failed crypto hedge fund Three Arrows Capital.
The firm now has since been working out how to return assets to investors who had its services. Voyager struck a deal with FTX in September of last year for the exchange to buy its distressed assets—but that was before FTX itself went bankrupt and its founder Sam Bankman-Fried was charged with a dozen financial crimes.