US Judge Michael Wiles Rules that SEC is Wrong in Objecting to Volayer x Binance Deal

US Judge Michael Wiles has questioned the actions of the SEC in Crypto lender Voyager Digital and a crypto exchange Binance proposed business partnership.

Voyager announced in December 2022 that it had chosen Binance.US as the company that had submitted the best and highest bid for its assets.

The transaction is estimated to be worth 1.022 billion dollars and will assist the crypto lender’s customers in gaining access to their assets as quickly as possible.

Per the terms of the agreement, the US branch of the cryptocurrency exchange was required to submit a good faith deposit of ten million dollars while also agreeing to compensate Voyager for certain costs totaling up to fifteen million dollars.

When that time comes, all of the lender’s assets and clientele will be moved over to Binance.

The conclusion of the transaction is dependent, however, on the permission of a Bankruptcy Court, the Securities and Exchange Commission, and the Committee on Foreign Investment in the United States (CFIUS).

The problems that Voyager was having began in July 2022 and were caused by the company’s exposure to the failed hedge fund Three Arrows Capital. As a result of the company’s ongoing financial concerns, it originally suspended withdrawals before filing for bankruptcy.

A senior lawyer for Voyager Digital stated a week ago that the company’s intentions to finalize the deal with Binance were proceeding as expected.

The attorneys claim that 97% of the vote cast in the case was in favor of their client’s position, which indicates that there is a possibility that the offer will be accepted in the end.

Despite this, the SEC appears to have a strong grasp on the arrangement that Voyager and Binance have reached, saying that:

“The transfers in digital currencies required to facilitate the realignment, the re-distribution of such holdings to Customer Accounts, may infringe the restriction Section 5 of the Securities Acts of 1993 against the unlicensed offer, sale, or delivery after the issuance of securities.

This prohibition is in place to prevent people from offering, selling, or delivering securities after they have already been sold.

It is up to the Debtors to provide convincing evidence that the terms of the Plan can actually be implemented and do not go against any laws that are now in effect.”

A US judge questions the Securities and Exchange Commission’s decision to go against the Voyager deal with Binance.


SEC Expressed Concern on Voyager Digital and Binance

It was alleged that the cryptocurrency lender is unable to verify that the transaction with Binance or any other cryptocurrency transactions complies with the laws governing securities in the United States.

Even though there are obstacles in the way of Binance’s acquisition of Voyager, the most recent development concerns the judge’s response to the SEC’s ambiguous reservations on the planned transaction.

On Thursday, Judge Michael Wiles stated that the Agency had requested to postpone the offer without providing precise justifications for their decision.

In addition, the lawyer for the Securities and Exchange Commission, William Uptegrove, did not provide any definitive information regarding whether or not the Commission believes that the sale violated US securities laws.

Instead, he responded (1) with:

“At this juncture, we are unable to take any position. The SEC is a body that engages in deliberation, despite federal law making its process confidential.

On the other hand, the judge showed signs of being unhappy with Uptegrove’s remark. He was adamant that the attorney provide precise details

“if there are reasons to be concerned.”


Featured Image Source: WSJ (2.1)

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