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SEC and NYDFS Voices Concerns on Binance.US and Voyager Deal

The agencies have voiced opposition to a proposed agreement of $ 1.02 billion between the United States branch of the popular crypto exchange Binance and the crypto brokerage Voyager Digital.

SEC HQ. Photo: SEC (1.1)

The United States SEC has voiced opposition (1) to a proposed agreement of 1.02 billion dollars between the United States branch of the popular cryptocurrency exchange Binance and the cryptocurrency brokerage Voyager Digital.

The monitoring organization for the financial sector has recently increased the amount of attention it pays to cryptocurrency and cryptocurrency startups.

In order to resolve SEC accusations, cryptocurrency exchange Kraken was recently had to cease its cryptocurrency staking operations. The corporation came to an agreement to end its bitcoin staking business and pay a fine of thirty million dollars.

The resolution was reached during a meeting of commissioners held behind closed doors earlier this month. Fear has spread among the crypto community as a result of this and other actions taken by the regulator, as it is unclear what the regulator will do next.

The announcement of the settlement between Kraken and Coinbase came after Coinbase CEO Brian Armstrong commented on speculations circulating that the SEC may outlaw cryptocurrency staking for retail users. He stated in his writing that such an occurrence "would be a dreadful road" for the nation to take.

SEC Raises Concerns About Binance

In the midst of the unfolding events, the SEC stated that the purchase of Voyager Digital's assets by Binance.US could turn out to be illegal or discriminatory.

The watchdog organization for the financial industry also stated that certain aspects of the arrangement may also violate the law. This was in reference to the strategy regarding the repayment of the lender's previous clients.

"In particular, they fail to fully explain if third parties, especially subsidiaries of Binance.US or foreign people or organizations, will have the ability to retrieve the keys for user wallets and control over anyone who has access to such wallets,"

The fact that there are no answers on how procedures would be implemented to secure clients' assets against being withdrawn from the exchange's platform is one thing that the SEC is concerned about.

According to the SEC's position, Binance.US has not provided any disclosures on its "internal control and policies regarding the security and safekeeping of customer assets."

The regulating body noted that it is Voyager Digital's duty to provide "credible proof" that demonstrates that the plans can be carried out successfully. The government noted that the proof is necessary to guarantee that the plan does not violate any laws that are currently in effect.

The NYDFS Opposes the Voyager-Binance Agreement

The Commissioner of Financial Services for New York voiced additional resistance to the proposed merger between Binance US and Voyager. It was stated by the state agency and Attorney General Letitia James that the cryptocurrency brokerage was providing customers with services in violation of the law.

"The Agency is informed of accusations and other evidence saying that a number of the Borrowers may have functioned and maybe still doing so in New York in violation of some sections of the law," despite the reality that all of the Debtors are licensed in New York.

The NYDFS asserted that Voyager increased the number of its consumers in the state of New York. As a result, it is conducting business in New York using virtual currencies in a manner that is contrary to the law.