By James Davis
On Tuesday, a bankruptcy judge gave Binance US the green to purchase Voyager assets following the dismissal of the Securities and Exchange Commission (SEC) objections.
If the purchase deal proceeds, Voyager customers will need to open Binance US accounts to recover their funds.
Binance US is an American subsidiary of the world’s leading exchange Binance. It caters to US clients and has claimed severally that it operates independently from its parent company. However, those claims have been disputed even within Voyager’s bankruptcy proceedings.
SEC and Other Regulators File Objections to Binance US-Voyager Purchase Deal
The SEC filed the first objection to the acquisition deal in January, requesting further information in regard to the financial capability of Binance US’s business.
Other regulators also filed their objections to the deal, including the Federal Trade Commission, the Texas Department of Banking, and the Texas State Securities Board.
US Attorney Damian Williams recently called the purchase deal an illegal way of seeking legal protection from potential criminal fraud charges.
Last month, the SEC claimed that Voyager’s VGX token is not a registered security. Therefore, the agency believes the transactions to refund assets to US clients would violate its policies against the sale of unlicensed securities.
According to the SEC, Binance US will also be considered an unregistered securities exchange for facilitating such transactions.
Why the Court Dismissed SEC Objections
However, Judge Michael Wiles was not convinced by the agency’s objections, mainly because the SEC failed to take an official position on the matter. While delivering the judgment, Wiles said the SEC was only committed to claiming that employees at the agency ‘believed’ Binance US and Voyager were violating securities rules.
The restructuring plan of Voyager includes legal protection for the firm. But the SEC wants to retain the ability to file charges against the crypto broker in the future. The judge gave the regulator until Wednesday to put forward a better argument.
Voyager filed for bankruptcy in July 2022 after disclosing significant exposure to the fallen crypto hedge fund, Three Arrows Capital (3AC). Since then, the company has been scheming how to return assets to its customers.
Voyager entered a deal with FTX last September for the exchange to purchase its assets, but the deal fell apart as FTX itself went crumbling down.