SEC Believes Binance.US is Operating an ‘Unregistered Securities Exchange’
- SEC Senior Trial Attorney William Uptegrove stated that the regulator’s staff believes that Binance.US is operating an “unregistered securities exchange.”
- The statement was given during a court hearing on Friday regarding the acquisition of Voyager Digital by Binance.US.
- The lawyer also added that the agency believes that the trading of VGX token represents the attributes of a securities transaction.
- US Bankruptcy Judge Michael Wiles in New York stated that the SEC did not provide enough evidence to back its objection to the acquisition deal.
The regulatory crackdown on the US arm of the world’s largest crypto exchange, Binance.US, has increased significantly amid the crypto market downturn, and it seems that the authorities in the United States continue to view crypto assets with increased speculation. It is crucial to note here that, as per a statement from an official at the Securities and Exchange Commission (SEC), the regulatory agency believes that the exchange is operating an unregistered securities exchange in the US.
According to a statement given by SEC Senior Trial Attorney William Uptegrove during a hearing regarding the offering and sale of crypto lender Voyager Digital’s VGX token and the acquisition deal put forth by Binance.US, the staff at the agency believes that the trading of the VGX token represents the attributes of a securities transaction.
“The commission has not made any determination on either of these issues, and the staff’s beliefs do not represent the position of the commission,” Uptegrove stated at a hearing in the US Bankruptcy Court for the Southern District of New York.
It is crucial to note that the Commissioners vote on enforcement actions based on recommendations provided by staff, but the beliefs of the staff do not represent the agency’s position.
Interestingly, the acquisition of Voyager Digital was supposed to be completed in 2022 by crypto exchange FTX. However, the exchange, under the leadership of Sam Bankman-Fried, also known as SBF in the crypto space, filed for bankruptcy in November, which gave Binance.US the green light to step in.
US Bankruptcy Judge Michael Wiles in New York gave the initial approval for the acquisition of Voyager by Binance.US. Moreover, if the deal goes through, Voyager customers will receive 51% of the funds that they had deposited at the time of the bankruptcy filing.
However, the acquisition deal has been viewed with increased scrutiny by several regulators, including the SEC. The regulator has objected to the sale and, as a result, has faced pushback from Wiles, who believes that the agency has not provided enough evidence to back its claims. The agency’s lawyer asked for a closed door meeting with the judge Friday evening, citing “statutory restrictions on our ability to share nonpublic information.”
A brief conversation was held between the judge, the SEC, the Voyager debtors, and lawyers for Binance.US following which, Wiles asked the regulator to make its statement public.
“This is a public court proceeding,” Wiles said. “Anything that further explains the basis for the SEC’s position, that seems to me is something everybody’s entitled to hear.”
Although the SEC lawyer stated that the agency believes that Binance.US is operating an unregistered securities exchange, Wiles stated that he still did not have “very much clarity” because the commission did not take an official position.
As reported earlier by BitcoinWisdom, Alameda Research, the sister trading company of FTX, sued Voyager Digital for a total of $445.8 million for its alleged involvement in the bankruptcy of the crypto exchange and its affiliates in November 2022.
Additionally, the Texas State Securities Board and the Department of Banking have expressed concerns regarding the acquisition deal between Binance.US and Voyager. The regulator said that the terms of service and restructuring plan of Binance.US contain several “inadequate” disclosures.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
