Binance.US Runs Into Continuing Objections to Acquisition of Voyager Digital

Binance.US continues to have a bumpy road in its efforts to acquire Voyager Digital.

The cryptocurrency trading platform — which is a separate entity from Binance Holdings but like that organization is majority owned by Changpeng Zhao — has faced criticism from United States regulators and senators as it works to move forward on the transaction that was announced in December, Bloomberg reported Friday (March 3).

In one of the latest objections to the planned acquisition, three U.S. senators sent a letter to Zhao and Binance.US CEO Brian Schroder alleging that Binance is a “hotbed of illegal financial activity” and demanding information about the companies’ finances and regulatory compliance efforts.

At around the same time, the U.S. Department of Justice wrote a filing in bankruptcy court that criticized some provisions Voyager added to its Chapter 11 plan this week as “blatantly illegal.”

Damian Williams, the U.S. attorney for the Southern District of New York, wrote in the filing, addressing one of Voyager’s provisions: “This breathtaking release seeking to immunize an unknowable number of ‘Person[s],’ in addition to the Debtors, from any and all liability, including all areas of law enforcement including criminal or civil fraud, securities, environmental, tax, and others, for conduct associated with transactions that may not have even occurred yet, is blatantly illegal.”

Binance.US said Dec. 19 that it would acquire the assets of bankrupt crypto lender Voyager Digital for $1.022 billion.

Voyager had filed for Chapter 11 bankruptcy protection on July 5, telling a bankruptcy court that it was “facing a short-term ‘run on the bank’” after a borrower defaulted on a $650 million loan.

About two weeks after Voyager’s acceptance of the Binance.US bid, it was reported that the U.S. Securities and Exchange Commission (SEC) filed a limited objection to the move, and the Texas State Securities Board and the Texas Department of Banking filed an objection.

Following the latest hurdles to the sale, Zhao expressed frustration on Twitter, according to the Bloomberg report.

In one tweet, he said of the deal with Voyager, “Maybe we should just pull out?”

Later, in another tweet, Zhao said, “We are still in support of the deal and helping returning funds to users as quickly as possible, if allowed to do so.”