The US Securities and Exchange Commission (SEC) opposes a $1.02 billion deal by Binance.US to buy the assets of the bankrupt crypto lender Voyager Digital.
The watchdog stated that it is formally investigating whether Binanec.US and other debtors violated the antifraud, registration, and other provisions of the federal securities laws.
The SEC filing notes that Voyager and Binance.US failed to adequately describe whether third parties, including Binance.US affiliates or foreign entities, will have access to the keys for user wallets or control over anyone with access to such wallets.
The regulator also stated that the parties involved have not fully disclosed the measures in place to guarantee that customer assets do not leave the Binance.US platform.
The SEC states “Although the Debtors’ witness made representations at the Disclosure Statement hearing regarding Binance.US’s protocols, no declaration has been filed by Binance.US regarding its internal controls and practices relating to the safety and custody of customer assets.”
The SEC is requesting that Binance.US respond to these valid concerns by disclosing details about who has access to Voyager’s customer assets and the appropriate safeguards once the deal is closed.
The entity says that creditors and other interested parties have a right to know whether this deal actually benefits them financially or if Binance.US is just buying Voyager’s client list for $20 million.
The filing states “The SEC reserves all rights to supplement this Objection and to present evidence at any evidentiary hearing on this matter, including on grounds not raised in this Objection.”
Last month, Voyager Digital receives initial court approval to sell its assets to Binance.US in a $1 billion deal. Until a court hearing is held on March 2 or shortly thereafter, the agreement won’t be considered final.
Before that, Voyager defended its plan to sell assets to Binance.US after facing opposition from Alameda Research, the SEC, the Department of Justice (DoJ), and state-level regulators who alleged that the Binance.US deal contains insufficient information on the feasibility of the Binance.US transaction, or the ability of Binance.US to conduct the deal.