US government calls for halt to $1 billion deal between Voyagerand Binance.US - here's why

 US government calls for halt to $1 billion deal between Voyagerand Binance.US - here's why

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Binance.US' plans to acquire the assets of Voyager Digital, a collapsed cryptocurrency broker, have stalled due to a demand from the US government to put the proposed deal on hold.

According to court documents, both the Securities and Exchange Commission (SEC) and the New York Financial Services Authority have raised objections to the $1 billion transaction, citing several concerns.

According to SEC, the Voyager deal could violate laws governing the unregistered offer and sale of securities.

More specifically, the agency said the crypto-asset transactions necessary to conduct the rebalancing "may violate the prohibition in Section 5 of the Securities Act of 1933 against the unregistered offer, sale, or delivery after sale of securities."

The SEC objection also referenced reports of U.S. investigations into Binance.US and global crypto exchange Binance, of which Binance.US is an alleged independent partner. "Regulatory actions" could make the deal "impossible to execute," it said.

New York's top financial regulator and New York Attorney General Letitia James also objected to the deal, saying Voyager was "illegally operating a virtual currency business within the state without a license"

The regulator also pointed out that Binance.US is neither licensed nor available in New York, meaning Voyager customers in the state will have to wait up to six months to access their funds.

"New York account holders will have no way to control the assets in their accounts, including whether they can sell cryptocurrency, to avoid further risk in the volatile cryptocurrency market," the NYDFS said, adding:

"In contrast, account holders in jurisdictions other than unsupported jurisdictions ('Supported Jurisdictions') will have the freedom to trade the cryptocurrency owed to them, defined as 'Net Owed Coins' in the APA, once their Binance US accounts are established and their assets migrated."

Meanwhile, U.S. Bankruptcy Judge Michael Wiles, who originally approved the deal last week, will hold a hearing tomorrow on the new objections raised by SEC and New York's top regulator.

"The court cannot tell the government to speak now or forever hold its peace before Voyager and Binance.US marry," Judge Williams said in a recent filing. "Nothing in the Bankruptcy Code allows courts to absolve parties from liability to the government for past and future conduct."