Amidst the Securities and Exchange Commission’s (SEC) objection to BinanceUS’ attempt to acquire cryptocurrency lender Voyager Digital, rumors have spread in the crypto community that Binance has canceled the deal.
Binance CEO Changpeng Zhao has stated on Twitter post the deal is still and will also help return funds to users as soon as possible.
US Judge Criticizes SEC’s Stance on Binance-Voyager Deal
According to March 2 Reuters reportA US bankruptcy judge has criticized the Securities and Exchange Commission for “raising doubts” about the proposed sale of crypto brokerage firm Voyager Digital to Binance.US.
U.S. Bankruptcy Judge Michael Wiles, who is assigned to the Southern District of New York’s Bankruptcy Court, said the SEC was essentially asking to “stop everyone in their tracks” during a court hearing on Thursday.
The regulator’s belief that “everything other than Bitcoin” is a security still persists, impacting the industry. In that sense, the SEC stated that the Binance-Voyager agreement should be stopped because it is suspected to be an illegal transaction under current regulations.
Alleged “selling of securities” has recently led to companies such as the crypto exchange Kraken, which was forced to shut down its staking service under the jurisdiction of the SEC due to the regulatory approach of the new regulator to the crypto industry.
Can Binance Complete Voyager Deal?
U.S. Bankruptcy Judge Michael Wiles appears skeptical of the Securities and Exchange Commission’s efforts to block the potential purchase of dormant crypto lender Voyager Digital by Binance subsidiary BinanceU.S. at a March 2 hearing in the Southern District of New York.
The SEC’s objections said the deal failed to clarify what it must do to “ensure that customer assets are not transferred from the Binance.US platform,” the SEC said, according to a Reuters report.
A spokesperson told Reuters that the company will:
(…) work with the relevant parties to provide the requested information, as the assets of Binance.US customers always remain on the platform and are held on a 1:1 basis, fully protected.
Additionally, the New York Department of Financial Services (NYDFS) has stated that Voyager Digital is “illegally” operating a virtual currency business in New York without a license.
Voyager filed for bankruptcy in July 2022, caught in the crypto season and the development of the crypto crisis. Voyager received preliminary court approval for its acquisition of Binance.US in February.
The Binance.US and Voyager deal seems to have all the odds. The SEC and NYDFS want to block the deal between the two companies. Regulators have hinted at possible interventions by the US national security review, which could delay or block the deal for the two crypto companies.
The total crypto market cap has dropped significantly since Thursday to $986 billion. Between the market decline and the possible bankruptcy of Silvergate’s crypto-friendly banks, the market has stumbled and increased investor fears.
The global cryptocurrency market capitalization has fallen by -4.27% in the last 24 hours and by -45.22% over the past year. Bitcoin’s market capitalization has dropped by $5 billion and is now $431 billion, which represents a 40.15% dominance of the sector.
Meanwhile, the market cap of stablecoins is at $136 billion, with a share of 12.69% of the total cryptocurrency market capitalization.
Featured images from Unsplash, charts from TradingView.com