The United States Securities and Exchange Commission moved against Binance.US’s proposed acquisition of Voyager Digital, a bankrupt cryptocurrency lender, in a deal valued at approximately $1 billion. The regulatory authority opposed asset purchase agreements at bankruptcy court filing.
SEC is responsible for regulating United States security markets, enforcing federal security laws, and investigating if debtors and others violate anti-fraud provisions of national security laws. SEC objected last Wednesday that Binance US’s disclosure statement did not give sufficient information regarding its worth in purchasing the assets of bankrupt Voyager Digital Holdings, Inc. The regulatory authority is further investigating to obtain more details of the purchase deal.
Flaws In Asset Purchase Agreement (APA)
As per SEC, the Binance.US asset purchase agreement lacks the following necessary information:
- Binance.US can complete a transaction worth $1.022 billion, considering its business nature after the acquisition.
- The Debtors need to provide specific information about how they will ensure the security of their customer’s assets, including any steps taken during the implementation of the plan and any measures Binance US will take after acquiring the assets to prevent theft or loss.
- Lack of clear information about how the Debtors will adjust their cryptocurrency portfolio.
- Suppose the sales transaction still needs to be completed by the deadline. In that case, the Debtors may sell any undistributed Cryptocurrency, buy Cryptocurrency supported by Voyager or the Purchaser’s platform, or meet any other transactions, including trading Cryptocurrency.
- However, more details about how these steps will be carried out are. Additionally, it should be made clear that rebalancing will not only happen in the event of liquidation but also in the context of a sale transaction.
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Furthermore, the regulatory authority officials had directed the concerns to provide a revised disclosure statement before the motion hearing. The authority has the right to amend the objection based on the revised disclosure statement. Therefore, the SEC asks the court to reject the Motions unless the Debtors adequately address the abovementioned issues and provide any other necessary and appropriate relief.
Brief Detail Of Purchase Deal
Voyager chose Binance.US as the top bidder in the latest December after a previous agreement with FTX fell through. The deal was worth over $1 billion for Voyager’s cryptocurrency portfolio and included an additional $20 million in “incremental value.