SEC Concern Over Voyager Digital Sale
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An editor at Coincrop
05 Jan 2023 | 4 min read
egulators are cautioning Binance US to take their time with the acquisition of Voyager Digital, citing potential issues.
In an effort to ensure Voyager Digital, a crypto lender currently in Chapter 11 bankruptcy proceedings, is not unfairly taken advantage of during their acquisition by Binance.US, U.S. regulators are requesting that the judge overseeing the case blocks this move until more information about both companies' finances and corporate connections with global Binance crypto exchange can be disclosed.
The U.S. Trustee, state regulators from New Jersey and Vermont, as well as the Securities and Exchange Commission have all submitted motions in opposition to Voyager's buyout attempt in their bankruptcy proceedings taking place at the Southern District of New York Court.
The objections lodged against the proposed deal to buy out a failing lender was that the current disclosures did not provide "essential information." Additionally, there are doubts as to Binance's financial capabilities of making it through this costly transaction amounting to over one billion dollars.
Additionally, regulatory entities raised worries about the affiliation between Binance.US and its global crypto exchange counterpart – Binance.
The New Jersey Bureau of Securities issued a stern warning that by transferring coins to Binance.US, customers are at risk of having their cryptocurrency directed and sent offshore to an account beyond the jurisdiction of U.S regulatory authorities - unbeknownst to them.
The situation is further complicated by the fact that FTX's operations were largely held offshore, making it more difficult for customers to access their assets stored in The Bahamas. This has caused a conflict between the Bahamian government, FTX Digital Markets (FTX's subsidiary based in The Bahamas), and all other branches of the FTX group as they go through bankruptcy proceedings within the US.
Sam Bankman-Fried, the former head of FTX, is facing criminal charges related to misusing customers' funds using offshore entities. On the other hand, Gary Wang and Caroline Ellison - both co-founders of Alameda Research - have acknowledged guilt concerning their role in this fraud case.
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