The State Securities Board and Department of Banking of Texas have filed an objection to the proposed deal between Binance.US and crypto lender Voyager Digital, which filed for bankruptcy in the US in December 2021. The objection, filed on February 24, cites “inadequate” disclosures in Binance.US’s terms of service and restructuring plan, including the failure to inform unsecured creditors that they may only receive a recovery rate of 24-26% under the plan, compared to the 51% they would receive under Chapter 7.
Binance.US had disclosed its agreement to purchase Voyager Digital’s assets for $1.022 billion in December, a move that was expected to significantly expand its presence in the US crypto market. However, the objection by the Texas regulatory bodies could pose a major obstacle to the deal.
The objection raises concerns that the proposed transaction may not be in the best interest of Voyager Digital’s creditors, who may receive significantly less than they would under the Chapter 7 process. In addition, the objection points out that the disclosures provided by Binance.US may not be sufficient to enable creditors to make an informed decision about whether to support the proposed deal.
Binance.US has not yet commented on the objection, but the company is likely to face additional regulatory hurdles in the US as it seeks to expand its operations. The objection by the Texas regulatory bodies highlights the challenges that crypto firms may face in navigating the complex and evolving regulatory landscape in the US, where different states may have different rules and requirements.
Overall, the objection by the Texas State Securities Board and Department of Banking to the Binance.US and Voyager Digital deal underscores the importance of thorough disclosures and transparency in the crypto industry. As regulators continue to scrutinize the sector, it will be important for companies to provide clear and comprehensive information to all stakeholders in order to build trust and confidence in the market.