SEC, New York regulator reject Binance.US’s $1 billion deal to buy bankrupt crypto lender Voyager

The U.S. Securities and Exchange Commission (SEC) and New York’s top financial regulator have blocked Binance.US’s $1 billion deal to buy bankrupt crypto lender Voyager Digital, the latest in a string of attempts by the government to enforce regulatory compliance on crypto firms.

Binance announced in November that it was preparing to relaunch a bid to buy the embattled Voyager Digital after FTX’s failed bid to acquire the company. In September, FTX acquired bankrupt Voyager’s assets for $1.42 billion.

In a filing on Wednesday, the SEC said the proposed deal may violate laws on the unregistered offer and sale of securities. The agency also cited multiple news reports of U.S. investigations into the global Binance crypto exchange, of which Binance.US is a purportedly independent partner, which means the deal could become “impossible to consummate,” Reuters reported.

Just last week, Reuters also reported that Binance moved $400 million from the bank account of a US partner to a firm managed by CEO CEO Changpeng Zhao. According to the report, Binance had secret access to a bank account belonging to its purportedly independent U.S. partner and transferred large sums of money from the account to a trading firm managed by Binance CEO Changpeng Zhao, Reuters said, citing banking records and company messages seen by the publication.

Binance has been plagued with problems in recent months. The DOJ is currently investigating the global Binance crypto exchange for possible money laundering and sanctions violations. According to Reuters, a top Binance executive told the Wall Street Journal last week that “Binance expected to pay penalties to resolve the investigations.”

On July 5, Voyager filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court of the Southern District of New York on Tuesday, according to a filing from the company. In its bankruptcy filing, Voyager estimated that it had more than 100,000 creditors and between $1 billion and $10 billion in assets and liabilities in the same range.

Voyager was founded in 2017 by established Wall Street and Silicon Valley entrepreneurs and veterans who teamed up to bring a better, more transparent, and cost-efficient alternative for trading crypto-assets to the marketplace. Its founders, Gaspard de Dreuzy, Oscar Salazar, Philip Eytan, Serge Kreiker, and Stephen Ehrlich, also have combined decades’ worth of experience from leading organizations like E*TRADE, Uber, TradeIt, and Lightspeed Financial.