The United States Securities and Exchange Commission (SEC) objects to Binance.US’ $1B Voyager Acquisition deal and has launched an investigation into whether Binance.US, Voyager, and related entities have violated federal securities laws. The move by the SEC comes after the agency expressed concern over potential security issues at Binance.US and pointed to Voyager’s VGX token as a potentially unregistered security.
Last December 2022, Binance.US and Voyager Digital announced a deal that would allow the former to purchase the assets of the latter. It is anticipated that customer funds will be made available in the near future and will be returned to the users’ accounts. However, the SEC’s recent investigation has raised concerns about the legality of the transaction.
One of the main concerns expressed by the SEC is whether Voyager’s VGX token constitutes an unregistered security. VGX tokens are used as a reward for users who trade on the Voyager platform, and the SEC is concerned that the token may be classified as a security and, as such, should have been registered with the agency.
The SEC has also expressed concern about possible security issues at Binance.US, citing potential vulnerabilities that could be exploited by bad actors. These concerns have raised questions about the safety and security of customer funds and assets held by the company.
In January, the SEC issued a limited objection to the Binance.US acquisition, alleging a lack of proof of the company’s financial strength. As Voyager sought bankruptcy protection in July 2022, the Federal Trade Commission launched an investigation on the company for misleading marketing. Voyager, though, has argued that the Binance.US agreement is the most favorable option for creditors. The business has called out the NYDFS’s complaints as being hypocritical and said that officials are limiting the distribution of cryptocurrencies.
The SEC faces backlash from the crypto community
The crypto community have expressed negative sentiment against the government agency and have criticized the SEC’s investigation as an attempt to classify all cryptocurrencies as securities and slow down the momentum of crypto adoption. They argue that the SEC’s focus on the classification of cryptocurrencies as securities is part of a wider agenda of further hampering the growth of the crypto economy.
The SEC is overstepping its boundaries and it is up to regulators and lawmakers to provide guidance and oversight. Congress plays an essential role in setting the legal framework for the SEC’s operations and provides oversight through the appropriations process.
Therefore, due to SEC’s unreasonable actions, lawmakers and regulators must provide constructive feedback and ensure that the agency operates within its mandate while promoting the growth of the cryptocurrency industry.
Rickie Sanchez is an article writer specializing in cryptocurrency news. Since late 2017, he has been actively investing in cryptocurrencies. He is enthusiastic about everything that has to do with crypto and he hopes that the readers of his articles in the years to come will gain a massive understanding of blockchain technology.