Regulators in Texas are debating over the benefits of the Binance-Voyager $1 billion acquisition deal to creditors, which is hinged on the $445 million loan claim from Alameda Research. In a recent filing, Texas regulators believe the Voyager-Binance deal is not worth bothering the authorities.
Doubting The Process
According to the court filing, the Texas banking and securities watchdogs noted that creditors of the bankrupt crypto lender, Voyager, might be better off should the firm liquidate its assets. However, the court document warns that Binance.US, the potential buyer of the bankrupt company, may be unlawfully offering securities through its staking program.
Furthermore, the filing revealed that if Alameda Research successfully proves its loan claims, the recovery would be reduced to 24%-26%. The amount is also lower than what the unsecured claimants can expect to receive in a Chapter 7 liquidation.
On the contrary, legal representatives of the bankrupt crypto lender believe that the Binance.US deal has significant support from creditors. Still, the filings indicate insufficient caution about the risks of interacting with Alameda.
It is worth noting that Alameda Research is the trading arm of the bankrupt crypto exchange FTX and has successfully revived its loan repayments before its collapse last November. Thus, the Texas filing warned that the Binance.US deal would likely be quashed.
Customers were not cautioned that the firm would send their data to unregulated exchanges abroad.
Concern Over Binance’s Business Model
Based on the recent filings from the Texas regulators, which were filed in the bankruptcy court in the southern district of New York, authorities are beginning to raise some issues over the Binance business techniques.
According to the director of enforcement at the Texas Securities Board, Joe Rotunda, the Binance.US staking program is not similar to traditional crypto staking. Consequently, it constitutes illegal securities offering.
Rotunda’s comment comes after the US Securities and Exchange Commission (SEC) slammed an enforcement action against another notable crypto exchange, Kraken. Kraken was charged a multi-million fine by the regulator in early February, with the exchange agreeing to end its staking offerings in the United States.
The Voyager-Binance deal has been opposed by federal agencies like the SEC and the Federal Trade Commission. These regulatory agencies have been investigating allegations of market manipulation by Voyager before its bankruptcy proceedings in July 2022.
Meanwhile, reports reveal that a hearing for the sale of Voyager is scheduled for March 2.