Written By In the ever-changing cryptocurrency sector, the US regulators have been keeping a close eye on deals and acquisitions in a bid to protect investors from fraud. Last week, popular crypto exchange Binance US announced its plan to acquire Voyager Digital’s assets in a $1bn deal. However, this deal has now hit a snag as US regulators step in to stop it. In this post, we’ll discuss why the US regulators have put their foot down on this deal and what this means for Binance US. We will also look at how other digital asset exchanges are responding to these regulatory changes and what they can do to ensure they stay compliant with the regulations.
What is Binance US?
Binance US is a digital asset exchange platform that was launched in 2019. The platform is designed for U.S. investors and offers a variety of features including a streamlined user interface, low fees, and advanced trading tools. Binance US is also one of the few exchanges that offer access to Initial Coin Offerings (ICOs).
In September 2019, Binance US announced a deal to acquire Voyager Assets, a leading digital asset broker-dealer. The deal would have given Binance US access to Voyager’s 2 million customers and $20 billion in assets under management. However, the deal was put on hold after U.S. regulators raised concerns about the acquisition.
Who are Voyager Assets?
Voyager Assets is a digital asset trading platform that allows users to buy, sell, and trade cryptocurrencies. The platform also offers a variety of other features, including a wallet, an exchange, and a debit card.
Voyager Assets was founded in 2018 by two former Wall Street executives, Estrada and Gorman. The company is headquartered in New York City.
Voyager Assets has raised $8 million in funding from investors including Lightspeed Venture Partners, Galaxy Digital Ventures, and Blockchain Capital.
What was the deal between Binance US and Voyager Assets?
Binance US and Voyager Assets had a deal where Binance would invest $3 million in Voyager for an equity stake. However, the US Securities and Exchange Commission (SEC) put a halt to the deal due to regulatory concerns. The SEC is worried that Binance US does not have the proper licenses to operate as a broker-dealer and investment adviser.
Why did the regulators put the brakes on the deal?
The Binance US exchange has been hit with a major setback after regulators put the brakes on its planned $300 million acquisition of fintech startup Voyager Assets. The deal, which was first announced in September, would have seen Binance US acquire a majority stake in Voyager and use its technology to help launch its own digital asset trading platform. However, the U.S. Securities and Exchange Commission (SEC) has now intervened, filing an emergency action and temporary restraining order against the deal on grounds that it may violate federal securities laws.
In its complaint, the SEC alleges that Binance US and Voyager founder Stephen Ehrlich misled investors by failing to disclose key information about the deal, including the fact that Ehrlich had previously been disciplined by the SEC for violating securities laws. The SEC also alleges that the deal itself was structured in a way that would have allowed Binance US to avoid some of the regulatory scrutiny that other digital asset exchanges are subject to.
The SEC’s action is a major blow to Binance US’s plans to become a leading player in the digital asset space. It also raises questions about whether other similar deals between cryptocurrency exchanges and fintech startups will be able to go ahead without running into similar problems with regulators.
What will happen now that the deal has been called off?
Now that the deal has been called off, Binance US’s $bn deal for Voyager Assets will not go through. This means that Binance US will no longer be able to operate in the US, and all of its customers will have to be moved to its new platform, Binance.US.
Conclusion
In conclusion, US regulators have put the brakes on Binance US’s $1 billion deal for Voyager Assets. While this has been a huge setback for both companies, it is clear that regulatory bodies are taking the necessary steps to protect consumers when it comes to digital asset purchases and investments. As such, both Binance US and Voyager must now look into alternative means of achieving their goals in order to achieve success in the American market.
