- Two Texas regulators have formally objected to Binance U.S.’s proposed takeover of Voyager Digital
- The Texas’ State Securities Board (TSSB) and the Department of Banking have raised a number of concerns regarding creditor safety
- The SEC has already objected to the move, which has been given court approval
Two Texas regulators have objected to the proposed takeover of Voyager Digital by Binance U.S., citing “inadequate” disclosures, such as a reduced recovery amount and concerns over the transfer of personal data. The Texas’ State Securities Board (TSSB) and the Department of Banking submitted a joint opposition to the takeover on Friday, summarising Binance.US’s disclosure statement as “inadequate”. Binance.US was given initial court approval for its proposed purchase in January by the United States Bankruptcy Court for the Southern District of New York, but it seems that there will be several more hurdles to clear before it can pop the champagne cork.
Creditors Not Protected, Claim Regulators
The dual objections by the TSSB and the Department of Banking highlighted several shortcomings in Binance.US’s terms of service and restructuring plan which suggested that customers weren’t going to get what they thought they would. Firstly, the regulators state that claimants have not been adequately informed that they may only receive a 24%-26% recovery under the plan, as opposed to the 51% they would receive under Chapter 7 bankruptcy.
Secondly, Binance.US’s disclosure statement allegedly failed to inform account holders that they are required to allow the transfer of personally sensitive information to any party in any part of the world, as dictated by Binance.US. The objection further noted that account holders will be stripped of any legal recourse for any issues that may arise as a result of this transfer of information, with the regulators saying that it gives them “absolutely no right to challenge the issue.”
Finally, the regulators say that the deal “unfairly discriminates against Texas consumers”, given that Texas is not a supported jurisdiction by Binance.US and therefore customers in the state would have their digital assets held by Voyager for six months after the agreement while Binance sought licensing in the state.
SEC Has Already Complained
The issues raised by the TSSB and the Department of Banking aren’t the only concerns over Binance US’s takeover of Voyager Digital; just a few days ago the Securities and Exchange Commission added its own objections, alleging securities law violations in some aspects of the restructuring plan.
