- The SEC said Binance.US could be running an unregistered securities exchange.
- US bankruptcy judge said that the decision is urgent.
- Voyager executives would get immunity from the SEC for creating new token.
Bankrupt crypto broker Voyager’s deal with Binance.US deal is hanging by a thread. The deal, which would, according to Voyager, help creditors recover funds, needs court approval. What stands in the way are the mounting objections by the US Securities and Exchange Commission (SEC).
The most recent SEC objection came on Friday, suggesting that Binance.US may be running an unregistered securities exchange. These claims might not be enough to block the deal, recent remarks by the bankruptcy judge suggest. On Monday, Judge Michael Wiles of New York’s Southern District Bankruptcy Court said that he could not delay the deal indefinitely.
“Bankruptcy code doesn’t contemplate an endless period of time,” the judge said according to CoinDesk. “Things have to be done. We have creditors who are waiting and who in the midst of all this uncertainty have no access to property in which they’ve invested in some cases their life savings, so we have to take some kind of action. We have to do something.”
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“We can't just put everything on pause just because we don't know for sure how the regulators will eventually make up their minds on points that they seem to have been debating for years," he added.
The judge indicated that he could come to a decision as soon as Tuesday morning, giving the SEC until then to come up with a more convincing argument.
Voyager Judge Gives Execs Immunity for New Token
If the judge approves the deal, creditors would receive a token that represents their claims. According to the SEC, this would represent an unregistered securities offering.
On Monday, Judge Wiles made it clear that the SEC wouldn’t be allowed to fine Voyager executives and advisers for issuing the token.
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He argued that the threat by the SEC would “leave a sword hanging over the heads of anybody who’s going to do this transaction,” Wiles said. “How can a bankruptcy case or any court proceeding function with that kind of suggestion?”
Instead, Voyager executives would have immunity from the SEC to implement the court-approved bankruptcy plan.
On the Flipside
- Binance.US recently came under scrutiny over its relationship with its parent company Binance.
- Voyager creditors are eager for the proceedings to end. Some 97% of creditors voted in favor of a deal.
Why You Should Care
The Binance.US deal with Voyager means that creditors could finally get some of their funds back.
Read more about the SEC’s objections to the deal:
Voyager Users Vote for Binance US Takeover: Regulators Claim Deal Leaves Execs Off the Hook
Read more about Binance’s recent troubles with the SEC:
Binance Leaks Spell Trouble with SEC, ‘Nuclear Fallout’
