Binance.US’ Acquisition of Voyager Digital Blocked By SEC

The US Securities and Exchange Commission (SEC) has filed a “limited objection” to the proposed $1 billion acquisition of bankrupt crypto lending firm Voyager Digital by Binance.US exchange.

In a limited objection made through court filing on Wednesday, January 4, the SEC said Binance.US had failed to include essential information concerning its disclosure statement.

A limited objection is different from a normal objection as it is only concerned with a specific part of the proceedings.

According to the watchdog, the deal lacks details concerning the ability of Binance.US to fund the acquisition, as well as failed to disclose how Binance.US operation would look like after the deal and how customer assets would be secured during and after the transaction.

The SEC also wants Voyager to give more details regarding what would occur in case the transaction is not sealed by April 18. 

Some market analysts, however, interpreted the SEC’s objection as a way of questioning Binance.US’ ability to afford the acquisition worth US$1 billion without obtaining funds from Binance global exchange.

Binance, which controls more than 50% of global cryptocurrency trading, is facing investigations by the US justice department for potential violations of sanctions and money laundering concerns.

In October, Reuters media revealed that Changpeng Zhao, the Binance founder and CEO, a Canadian citizen but born in China, controlled Binance.US, directing its management from abroad. However, Mr. Zhao responded that Binance.US is a fully independent entity and further said Binance was committed to complying with regulatory authorities.

Last month, the Committee on Foreign Investment in the United States, which is responsible for vetting the national security impacts of foreign investments in US firms or operations, said it was reviewing the planned acquisition; the move was likely to delay or block the deal.

The announcement by the SEC is the latest hurdle facing the acquisition deal between Binance.US and Voyager, another regulatory scrutiny for Binance and its affiliates.

Market turbulence 

In July, Voyager Digital filed for bankruptcy after the crashes of TerraUSD stablecoin plunged the crypto industry.

In September, FTX.US was set to acquire Voyager after winning a bankruptcy auction for Voyager’s assets with an offer worth $1.4 billion, which was considered the best deal to enable Voyager customers to recover 72% of their frozen assets.

However, the deal failed to go through when FTX filed for bankruptcy in November. The collapse of FTX has sent shockwaves through the industry. The prices of Bitcoin and major altcoins have dropped sharply as the impact from the dramatic fallout of once a $32 billion exchange continues to cause ripple effects in the market.

At the time of writing, Bitcoin price is trading at $16,836.22 USD, down 0.03% in the last 24 hours, according to Tradingview. Bitcoin is 75.58% below the all-time high of $68,789.63 witnessed in November 2021.

On December 19, Voyager accepted Binance.US’s bid to acquire its assets in a deal worth $1.022 billion. The Voyager regarded the bid as the best for its assets which would maximize the value returned to clients and creditors on an accelerated timeline.