Binance.US has abandoned its plans to acquire Voyager Digital's assets due to regulatory hurdles in the United States, leaving the future of the bankrupt crypto lender uncertain. Federal and state regulators objected to the deal, arguing it might violate securities laws and registration rules. The situation highlights the need for a clear and uniform legal framework in the United States, as well as open communication between industry players and regulatory agencies.
Binance.US has abandoned its plans to acquire bankrupt crypto lender Voyager Digital's assets due to the challenging regulatory environment in the United States. The American affiliate of the world's largest crypto exchange terminated the agreement as federal regulators were poised to contest the deal in court. Binance.US expressed disappointment over the situation, citing the unpredictable American regulatory landscape as a barrier to assisting Voyager's customers.
A committee representing Voyager creditors in bankruptcy proceedings expressed their disappointment and is considering potential claims against Binance.US. In March, a federal judge temporarily halted the proposed deal following a request from the US government for an emergency stay. The US Attorney's Office for the Southern District of New York and the Department of Justice's (DOJ) bankruptcy watchdog appealed against the sale, which had been approved by a bankruptcy judge. The emergency stay was requested on the grounds that the transaction could involve unregistered securities and transactions violating federal securities laws.
The sale process is paused until the DOJ pursues appeals challenging the deal's legality through the US court system. Despite objections from federal and state regulators, Judge Michael Wiles approved the proposed restructuring plan earlier this month. The winning bidder was to make a $10 million “good faith deposit” and reimburse Voyager for certain expenses up to $15 million. Binance.US had until April 18, 2023, to finalize the acquisition; otherwise, Voyager would pass the additional fees to customers after a one-month extension.
Recently, Binance.US announced that the takeover of Voyager for $1.3 Billion might happen in a few months. Here is the full news: https://www.wikibit.com/en/202303089674755600.html
Voyager Digital filed for Chapter 11 bankruptcy in 2022 after the crash of major crypto tokens TerraUSD and Luna. Most of its creditors voted to opt their claims into a “wind-down entity,” with 65% of Class 3 Ballots and 85% of “holders of claims or interests in the non-voting classes” voting to opt in. However, US federal and state regulators objected to Binance's proposed purchase of Voyager Digital's assets, arguing that it might violate securities laws and registration rules in the country.
The SEC warned that distributing Voyager's VGX token as part of Binance US's rescue plan might be considered the sale of an unregistered security. The agency also noted that the bidder could be an unregistered national securities exchange. The New York Department of Financial Services (NYDFS) and New York Attorney General Letitia James also opposed the deal, claiming that Voyager was unlawfully serving customers in the state. They questioned the timeline for customer repayment while Binance.US sought approval in New York, where residents would have to wait six months to recover their assets.
As a result of the regulatory hurdles, Binance.US's decision to abandon the acquisition of Voyager Digital's assets has left the future of the bankrupt crypto lender uncertain. With the agreement's cancellation, the status of Voyager's clients and their ability to access their crypto holdings is unknown.
The continuous regulatory problems confronting Binance.US and other crypto exchanges and companies highlight the need for a clear and uniform legal framework in the United States. The existing regulatory environment's lack of clarity has the potential to discourage innovation and impede the development of the Bitcoin business.
It is crucial to remember that, although the purchase has been postponed, Voyager Digital is not definitely out of the woods. Alternative buyers or restructuring strategies are still possible. The result, however, will be heavily influenced by the success of the current bankruptcy procedures as well as the shifting regulatory environment.
This circumstance also emphasizes the significance of communication between authorities and the Bitcoin sector. Establishing a clear regulatory framework and open communication between industry players and regulatory agencies would benefit all parties by encouraging innovation while protecting consumers and guaranteeing market stability.
Finally, Binance has been terminated. The United States efforts to purchase Voyager Digital's assets represent a huge blow for the insolvent cryptocurrency lender. The unpredictability of the legal environment in the United States has not only hampered the possible purchase but also raises larger worries about the country's bitcoin industry's future. As the situation develops, the need for a well-defined regulatory framework, as well as coordination between regulators and industry actors, becomes clearer.
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