Feb 23, 2023
SEC Objects to Binance.US’ $1 Billion Acquisition
The United States Securities and Exchange Commission (SEC) has raised concerns over Binance.US’ proposed acquisition of roughly $1 billion in assets from the defunct crypto lending firm Voyager Digital.
In a Feb. 22 filing with the U.S. Bankruptcy Court in the Southern District of New York, the SEC expressed worries that certain elements of the asset restructuring plan could be in breach of securities laws.
The SEC is investigating whether Binance.US and related debtors have violated anti-fraud, registration, and other provisions of the federal securities laws. The regulator is particularly concerned about the security of assets through the planned acquisition, as well as the lack of safeguards to ensure that customer assets are not transferred off the Binance.US platform.
The SEC is asking Binance.US to provide more information regarding who has access to customer assets and the necessary controls after the deal is finalized.
The SEC is also questioning Binance.US’ initial plan and disclosure statement for its Voyager bid, which allows the company to sell cryptocurrencies belonging to Voyager to distribute to account holders. The SEC believes that such sales may not comply with federal securities laws.
Furthermore, the SEC is worried about the potential of Voyager buying and selling certain digital assets to rebalance asset holdings. If Voyager were to sell VGX tokens, which it issues, this could potentially constitute an unregistered offer or sale of securities under federal law.
The SEC also notes that Binance.US could be acting as an exchange under existing Exchange Act laws, which it is prohibited to do without the necessary registration as a national securities exchange or exemption from doing so.
The SEC is concerned that the disclosure statement provided by Binance.US and other debtors does not address the possibility of these transactions being unlawful, which could impact the estimated 51% recovery of funds that will be paid out to account holders and claimants of Voyager.
The regulator is questioning whether Binance.US and other debtors will be able to recoup some of their assets following the bankruptcy of the firm.
Binance is also dealing with regulatory action towards Paxos, which is responsible for issuing Binance’s US Dollar backed BUSD stablecoin. The New York Department of Financial Services (NYDFS) ordered the firm to stop minting BUSD tokens from Feb. 21. Paxos has countered claims from the SEC that BUSD is a security, after receiving a Wells notice from the regulator for failing to register the token as a security in the U.S.
The SEC’s scrutiny of Binance.US’ acquisition of Voyager’s assets is a reminder of the importance of proper compliance when selling and marketing Non-Fungible Tokens (NFTs). Companies selling NFTs must ensure they are compliant with all relevant laws and regulations, or they risk facing fines and other penalties.
NFTs are a unique form of digital asset, and as such, marketing them requires a unique approach. Companies must ensure that they are using the right channels to promote their NFTs, such as Twitter and other social media platforms. They should also consider working with a web3 agency or NFT marketing agency to ensure their NFTs are properly promoted and sold in a compliant manner.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
