The U.S. Securities and Exchange Commission is ramping up its war on crypto with the latest move to scupper a Binance buyout deal.
In a filing on Jan. 4, the financial regulator submitted a limited objection and reservation of rights. The SEC is pushing back on Binance’s U.S. division’s plan to buy bankrupt crypto lender Voyager Digital in a deal valued at around $1 billion.
According to the agency, the purchase agreement does not include sufficient detail about Binance’s ability to close the transaction.
It stated that the asset purchase agreement fails to include details about:
“The ability of Binance US to consummate a transaction of this magnitude, which the Debtors value at $1.022 billion, including the nature of Binance US’s business operations after the acquisition.”
SEC Wants More Details on Customer Reimbursements
The regulator also requires further detail regarding how Voyager Digital (the debtors) intends to secure customer assets. It wants information on safeguards implemented to protect against theft or loss by both the debtors and Binance US after its acquisition of assets.
Further detail regarding the rebalancing of Voyager’s cryptocurrency portfolio has also been demanded by the SEC. Essentially it wants to ensure that customer funds are returned in full before Voyager takes anything from the sale deal.
Details on selling crypto assets that cannot be distributed to account holders, purchasing cryptocurrency supported by Voyager or Binance that shall be distributed to account holders, and consummating any other transactions necessary or appropriate to effectuate distributions to account holders, have been requested.
While these concerns appear to be valid, the SEC and Chair Gary Gensler appear hell-bent on stifling crypto in its entirety instead of working on efforts to heal the industry and move it forwards.
In mid-December, that Binance U.S. entered into an agreement with Voyager Digital to acquire its assets. In late October, FTX U.S. won a bid to buy up the distressed assets, just a couple of weeks before it collapsed.
Crypto Market Outlook
Voyager Digital suspended withdrawals and filed for Chapter 11 bankruptcy in early July. Since then, crypto markets have declined by 10% or around $100 million.
Today, the total market capitalization is around $854 billion. Markets have gained 1.7% over the past 24 hours but remain in a tight, range-bound channel with extremely low volatility.
Analysts have predicted several more months of this market lethargy.