CEFIREGULATION

Three major regulatory bodies simultaneously propose opposition motion, accusing Coinbase, Binance US, and Voyager of trading unregistered securities.

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Three major regulatory bodies simultaneously propose opposition motion, accusing Coinbase, Binance US, and Voyager of trading unregistered securities.

Binance.US plans to acquire the bankrupt platform Voyager for $1.02 billion. In early January, several institutions opposed Binance's acquisition, but by mid-January, the acquisition had received preliminary court approval. Now, the New York State Department of Financial Services (NYDFS), Attorney General Letitia James, and the SEC have all come out to oppose the acquisition once again.

SEC: Potential Unregistered Securities Sales

According to legal documents, the SEC has stated that it will investigate whether the debtors violated federal securities laws, including fraud and registration, as recent events have shown that cryptocurrency platforms cannot guarantee the security of user assets.

The allegations against Binance.US include the following:

  1. Failure to clearly describe whether third parties, including Binance, have permission to access user wallet keys.

  2. Failure to clearly describe adequate security measures to ensure that user assets are not transferred out of the platform without cause.

  3. Despite Binance's explanations at disclosure statement hearings, they did not provide detailed statements regarding user asset security and internal controls.

  4. For the purpose of balancing the debtors' assets, Voyager will be involved in buying and selling cryptocurrencies, including its VGX platform token, which could potentially constitute unregistered securities issuance and sales.

The SEC believes:

Voyager did not conduct proper due diligence, and creditors have the right to know if the transaction brings any meaningful economic benefit, otherwise it is merely selling the Voyager user list to Binance.US for $20 million.

New York Department of Financial Services (NYDFS): Unfair Treatment of New York Users

According to legal documents, the New York Department of Financial Services accuses:

  • Voyager of soliciting New York users and illegally operating a cryptocurrency business without a license, depriving users of the consumer protections they deserve.

  • Under the asset purchase agreement, Binance.US is also not authorized to operate a cryptocurrency business in New York.

As they are not registered in New York, this means that until Binance US is approved, New York users are left waiting compared to users in other jurisdictions, unable to control their account assets. The NYDFS believes this may lead to more risks in the volatile crypto market.

It is stated that the licenses of Voyager and Binance US are still under review, with no exact date of issuance.

New York Attorney General

The motion filed by the New York Attorney General is very brief, with almost no content.

Previously, Voyager emphasized that the acquisition by Binance.US could provide the best outcome for creditors, and they criticized the opposition from the NYDFS as hypocritical, stating that regulatory agencies are limiting their ability to return user assets.