Binance, the world’s biggest crypto exchange, has recently come under heavy scrutiny. Since December 2013, a crypto company has been attempting to navigate around the failed exchange Voyager Digital. Major regulators demanded that the court halt Binance’s planned buyout of Voyager, claiming it violated securities laws.
The Securities and Exchange Commission and New York State Department of Financial Services published objections to Binance’s plan to purchase Voyager. Binance has been in bankruptcy proceedings, and the agency requested that the New York Southern District Bankruptcy Court halt the planned purchase.
The SEC objected to the deal, stating that it may involve unregistered securities. Voyager.US wrote that Binance would not be able to access customer wallets, implying that Binance would have access to customers from the former exchange and their crypto.
New York’s financial regulators made similar arguments, claiming that Voyager illegally operated a virtual money business in the state without a license. Additionally, the department stated that account holders would be less likely to get their money back because Binance.US is still not licensed to operate within the state. Voyager is allowed to keep users’ crypto for six months or until the exchange’s approval. However, regulators say that New York customers won’t be able to get their money back until then.
A Binance.US spokesperson stated in an email to Gizmodo, “We will work closely with the relevant parties to provide any requested information, as Binance’s US customers’ assets remain online at a 1:1 level, and they are fully reserved at all times. We look forward to welcoming Voyagers to Binance.US. 97% of Voyagers have already voted to approve the plan.”
Gizmodo also reached out to Voyager’s lawyer for comment but did not receive an immediate response. Other objections were filed regarding the Voyager purchase, and Letitia James, New York’s Attorney General, signed on to the objections by the state financial division.
Despite Paxos’s release of a stablecoin backed by BUSD, both regulators have raised concerns about Binance. Paxos had intended to sue them over their stablecoin. New York regulators ordered Paxos to stop minting its USD-stamp coins. According to Reuters, Paxos is now discussing its stablecoin. However, it’s unknown what types of discussions they might have.
Binance.US has been attempting to claim that Changpeng Zhao, the CEO of Bitcoin, is untrustworthy. Several years ago, the United States was an “independent” partner. That’s been in doubt for some time, particularly since its former CEO Brian Brooks quit after trying to set some distance between the two. Reuters reported this week that Zhao had secretly accessed Binance and used funds from that account to finance his personal expenses. Binance.US later confirmed that a Zhao-managed business had been operating on its platform, but claimed that the exchange “stopped all activities” in 2021.
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Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
