A recent court document (1) has disclosed that the state of Texas is pushing against the proposed acquisition deal between failed crypto lender Voyager Digital and cryptocurrency exchange Binance.US. The Texas State Securities Board has expressed several concerns regarding the transaction terms and conditions in the motion they have jointly submitted.
Binance.US had agreed to purchase Voyager’s assets for more than one billion dollars. On the other hand, recent information has revealed that the company’s terms of service may have several flaws and deficiencies.
Concerns Have Been Raised About the Terms of Service Provided by Binance.US in Texas
According to the papers filed with the court, Binance.US does not indicate explicitly in the proposal that unsecured creditors may only collect between 24 and 26% of their cash if they choose to do so. To put it another way, this is in contrast to the 51% that they may receive under Chapter 7.
In addition, Texas states that Binance.US failed to warn account users that they would be forced to authorize their “personally sensitive information” to be transmitted to any entity in any region of the world, and this was not communicated to account holders by Binance.US. However, holders of the accounts will have no legal recourse available to them if any problems surface in the future. The following is an excerpt from the objection statement:
“The customers have practically no right to protest the matter in any way, shape, or form if any problems emerge in the customers’ access to or usage of Binance.US’s services.”
Another significant issue brought to light by the complaint is that the plan appears to discriminate unfairly against customers in Texas. Binance.US does not yet possess the licenses to conduct business in the state.
As a result, Voyager would have to act as the custodian for any digital assets belonging to consumers in Texas. At the very least, for around half a year after the agreement. At this point, Binance.US would start applying for an operational license in the state.
In addition, the opposition brings up the fact that it is very difficult for Binance.US to obtain the license in such a short amount of time. So, keeping customers’ money in storage for those six months won’t accomplish anything useful.
Increasing regulatory pressure on Binance.US
In the meantime, the filing comes just a few short days after the Securities and Exchange Commission (SEC) submitted a filing to a bankruptcy court in New York.
The primary supervisor claims that certain aspects of the reorganization plan contravene laws about the sale of securities. As a result, it will investigate Binance.US, along with several other creditors, to see whether or not they have violated any federal securities laws.