CEFIREGULATION

Voyager Hearing | Judge criticizes SEC as "puzzling": Opposes Binance US acquisition without substantial evidence

share
Voyager Hearing | Judge criticizes SEC as "puzzling": Opposes Binance US acquisition without substantial evidence

The latest hearing at Voyager was chaotic, with disputes erupting between Voyager directors and creditors, and the approval of the acquisition by Binance.US still hanging in the balance. The judge expressed astonishment at the SEC's opposition to the acquisition without presenting any substantial evidence.

According to the proposed sale agreement, Voyager's lawyers stated that if the acquisition is successfully completed, creditors are expected to receive a 73% compensation. However, if Alameda's previous lawsuit against Voyager demanding the return of the approved $4.458 billion is granted, the compensation ratio will drop to 48%.

Binance.US Acquisition Blocked

Binance.US planned to acquire the bankrupt platform Voyager for $1.02 billion. Although the acquisition was preliminarily approved by the court in mid-January, the New York State Department of Financial Services (NYDFS), Attorney General Letitia James, and the SEC all filed motions against the acquisition at the end of February.

Three major regulatory agencies simultaneously objected to the acquisition, alleging that Binance.US and Voyager deal involved the sale of unregistered securities.

Judge Criticizes SEC Representative

According to The Block report, Judge Michael Wiles expressed surprise at the SEC's opposition to the acquisition, as they failed to provide any relevant evidence:

I am shocked that a regulatory agency would say, "These platforms are within my regulatory reach, this is the reason I am concerned, but I have not done anything except express concerns. I have nothing to offer you other than concerns." That is just incredible.

The crypto community VGX Heroes provided more details from the hearing.

When asked if the acquisition plan violated any regulations, SEC lawyer William Uptegrove's response was cryptic:

We cannot comment at this time. The SEC is a deliberative body, and under federal law, the investigative process is non-public.

Judge Michael Wiles was quite puzzled and wanted to know what investigation the SEC had conducted. While acknowledging the role of a deliberative body, he expressed concerns that if the reasons for the SEC's opposition were genuine, he needed to understand the specifics:

You are asking the debtor to prove that the cryptocurrencies being traded are not securities, but you have not provided any regulatory guidance on this.

VGX Heroes pointed out that creditors Alah Shehadeh and Alski iHustle were expelled from the hearing due to causing disruptions.

Throughout the hearing, the judge repeatedly urged creditors to focus on the proceedings, as they occasionally veered off-topic and expressed disappointment with Voyager. The judge stated:

This is not a talk show, not a complaint session, not a crypto news channel. The situation is what it is, and we cannot undo the past.