Why the US SEC Has Objected to Binance’s Voyager Takeover Deal

The US Securities and Exchange Commission (SEC) has filed a limited objection to Binance.US’s proposed $1 billion (roughly Rs. 8,250 crore) acquisition of bankrupt cryptocurrency lender Voyager Digital, a bankruptcy court filing showed on Wednesday. The regulator pointed out the failure to include necessary information in Binance.US’s disclosure statement.

It said the purchase agreement lacks details on the crypto exchange’s ability to close the deal and has asked for more information on the nature of the company’s business operations following the deal, according to the filing.

Attorneys for Voyager and Binance.US did not immediately respond to requests for comment.

Last month, the US Committee on Foreign Investment in the United States (CFIUS) said its review could delay or block the deal.

Binance has been the subject of a money laundering probe by US prosecutors. Binance.US, based in California’s Palo Alto, has said that its separate American exchange is “fully independent” of the main Binance platform.

Towards the last leg of December, Binance recorded a large number of withdrawals following the collapse of the FTX crypto exchange, which succumbed to a liquidity crunch. At the time, CEO Changpeng Zhao had called this ‘normal market behaviour’ while attempting to pacify crypto investors.

Between 2021 and 2022, the overall crypto sector lost over $2 trillion (roughly Rs. 1,65,74,700 crore). The Russia-Ukraine war, the recession that followed the COVID-19 pandemic, repeated hack attacks, and the collapse of promising crypto projects like LUNA and FTX slashed investor engagement in the sector.

Under market stress, companies like CryptoCom and Binance among a number of others resorted to trimming their respective workforces, firms like BlockFi, Celsius, and Voyager Digital filed for bankruptcy.