The American branch of Binance is suspected of offering its services illegally. According to a spokesperson for financial regulator SEC, the cryptocurrency exchange has not been granted a license or permit.
The SEC’s claim has two arguments. The first is that Binance wants to acquire US cryptocurrencies and other assets from the bankrupt Voyager. This may be a violation of securities laws. The second argument is that Binance US is completely illegal and operates as an unregistered exchange.
Buy crypto in violation of securities laws
Binance US plans to acquire Voyager and associated VGX tokens. During a bankruptcy and takeover hearing for this cryptocurrency, the SEC’s William Uptegrove said it could fall under securities laws.
Uptegrove said:
“Based only on the facts and circumstances currently known to the team, the team believes that the offering and sale of VGX tokens has the characteristics of a securities transaction.”
“The team also believes that Binance.US operates an unregistered exchange in the United States.”
No planned application
The official noted that the staff’s views do not necessarily reflect the views of the five commissioners who lead the SEC. He also made no mention of enforcement actions.
“The committee has not made a decision on any of these issues,” he said. “The team’s beliefs do not reflect the committee’s opinion.”
The difference between management and employees is similar to the professional opinion of a normal employee and that of his manager.
Typically, an SEC enforcement action is initiated by the staff, but a majority of the commissioners must vote in favor of proceeding.
Binance considers weak prosecution
According to Binance US, such a statement should be more concrete:
“It is unfortunate that an SEC official alleges that Binance.US and platforms like ours operate an unregistered exchange without disclosing the assets listed on our exchange, which the SEC considers to be securities.”
“Together with others in our industry, we remain committed to maintaining a constructive dialogue with regulators and supporting a comprehensive regulatory framework established and approved by Congress to ensure that innovation continues in the United States.”
The SEC is taking a hard line
While this is only Uptegrove’s view and does not represent the entire SEC, the position of this government agency is clear.
For example, President Gary Gensler has said in the past that he believes most cryptocurrency exchanges should be registered as national exchanges. Once registered, these exchanges would be at the mercy of the SEC.
What happened to Voyager again?
Voyager was an exchange, so you could buy and sell cryptocurrencies, as well as store cryptocurrencies to earn interest. They then lent that cryptocurrency to other parties. To borrow cryptocurrencies, you had to deposit collateral yourself to give the company some security.
One of those borrowers was Three Arrows Capital (3AC). The latter company had a $650 million loan from Voyager but was unable to repay it. 3AC has since gone bankrupt, dragging Voyager with it.
Voyager plans to sell its assets to Binance US as part of a restructuring plan. In the US, this can be done through a so-called Chapter 11 bankruptcy filing. The vast majority of Voyager’s creditors (97%) support the proposed acquisition.
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Source: Btc Direct
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
