SEC Moves to Block Binance.US Attempt to Buy Distressed Assets of Voyager Digital

The SEC has objected to an attempt by the American franchise of Binance to buy up assets from the bankrupt crypto lender Voyager Digital, saying more information about the deal is needed.

The “limited objection” from the SEC came in a court filing on Wednesday, where the SEC said Binance.US in its disclosure statement had failed to provide sufficient details on its ability to close the deal, Reuters reported.

In addition to requesting more details about the deal, the SEC also said it needed more information about the nature of the planned business operations after Voyager assets have been taken over by Binance.US.

“A diligent review of the deal is to be expected and welcomed. We will work with the relevant parties to provide any requested information. We look forward to completing the transaction,” a Binance.US spokesperson was quoted by Reuters as saying.

$1bn deal

Binance.US has previously announced the takeover of distressed assets from Voyager Digital in a deal that valued Voyager at about $1bn. Under the deal, Binance.US was to make a deposit of $10m, and reimburse Voyager for certain expenses up to $15 million.

In total, the purchase price is $20 million, in addition to repayments to Voyager’s customers.

The news that Binance.US had made the highest bid to buy Voyager was announced by Binance.US CEO Brian Shroder in December last year:

1/ Today, @BinanceUS was selected highest and best bid in Voyager’s reopened bankruptcy asset auction. Once the deal is completed, Voyager users will finally be able to access their digital assets on the https://t.co/Wc26vMosC4 platform.

Read: https://t.co/gBK5m3kcYn

— Brian Shroder (@BrianShroder) December 19, 2022

The exchange’s interest in acquiring Voyager first became known in November last year following the collapse of the major crypto exchange FTX, which had originally planned to buy Voyager. When FTX went bankrupt, however, Voyager said it would reopen the bidding process for the company, and that it was in “active discussions with alternative bidders.”

Voyager Digital filed for bankruptcy under Chapter 11 of the US Bankruptcy Code in July last year, saying at the time that it seeks to implement a reorganization plan and “maximize value for all stakeholders.”

Increasing scrutiny of Binance

As the largest exchange in the crypto industry, Binance – and by extension Binance.US – has seen increasing scrutiny from regulators in recent times.

In December, news broke that Binance and senior executives, including CEO Changpeng Zhao, could be facing money laundering charges in the US. At the time, news reports indicated that opinions on Binance were divided the within US Department of Justice (DOJ), and that this disagreement has caused a delay in the conclusion of a long-running investigation of Binance.

Binance.US is led by Brian Shroder, and the company insists it is a fully independent entity that is operated separately from Binance’s global exchange business.