The regulator finds the data provided by Binance US and Voyager Digital in the asset purchase agreement insufficient. The debtors must also provide details on safeguards.
Last December, bankrupt crypto lending platform Voyager Digital, which was originally slated to be taken over by FTX, announced its $1 billion buyout by Binance US, the U.S. subsidiary of the giant Binance.
As it stands, the stock market watchdog objects to the agreement between Binance and Voyager Digital with a “limited objection”. The SEC considers that the disclosure statement and the APA (approval of an asset purchase agreement) “do not contain the necessary information”.
Binance US’s ability to complete such a transaction
In its request, the SEC questions in particular the capacity of Binance US to finance such an amount, which exceeds one billion dollars.
The administration is seeking to clarify grey areas regarding Binance US’s finances and its relationship with its global parent Binance.
“However, the disclosure statement and ABS does not include the following necessary information:
Binance US’s ability to complete a transaction of this size, which the debtors estimate to be $1.022 billion (APA Motion at 2), including the nature of Binance US’s post-acquisition business operations.”
The authority asks for explicit mention of “the safeguards that will be put in place to protect against theft or loss by both the debtors, during the implementation of the plan process, and Binance US, after its acquisition of the assets”.
The SEC’s objection will be considered by the judiciary as part of its review of Voyager Digital’s bankruptcy plan. The financial watchdog says it has been informed by the debtors’ lawyers “that a revised disclosure statement will be filed prior to the hearing.
Based on that amended document, the SEC reserves the right to modify its objection. That is an option. However, it “further reserves the right to object to confirmation of the Plan on these or any other bases.”