SEC Continues To Lose Public Support As Voyager And Binance US Deal Gets Finalized

Following a favorable bankruptcy court ruling, Binance US is reportedly proceeding with its intentions of obtaining the $1.3 billion assets of the downtrodden crypto lender Voyager. Judge Michael Wiles will therefore sign a court order authorizing the sale and the associated $20 million payout plan to Voyager customers.

What happened?

Judge Wiles overruled the eleventh-hour objection from the SEC that parts of the $1.3 billion deal might violate securities laws. The Judge was unwilling to place the entire case on indefinite hold while regulators determine whether they believe there are indeed issues with the transaction and plan or not.

Moreover, instead of proceeding with the sale, Voyager may choose to liquidate on its own and distribute the proceeds to customers, according to Brian Tichenor, the lead investment banker for the company. The United States will also reportedly give customers an additional $100 million.

In a court filing in January, the embattled crypto lender Voyager estimated that customers would receive approximately half of the amount owed, but during a court hearing on March 2nd, Voyager attorney Christine A. Okike stated that customers would receive approximately 73% based on recent crypto asset prices.

Elsewhere, in the initial appeal hearing for Grayscale and its Bitcoin spot ETF, judges expressed concerns about the reasoning provided by the SEC, claiming that the agency had failed to explain why Grayscale was in the wrong here. They also questioned why futures-based Bitcoin ETFs were permitted while spot-based ETFs were not.

The SEC losing its touch?

The United States SEC has taken a number of actions against crypto companies and individuals over the years, which has understandably sparked outrage among many in the community. Subpoenas, fines, and lawsuits have been issued against numerous companies and individuals who have been charged with promoting unregistered securities, the most famous example of which would be the still ongoing legal battle with Ripple.

Due to this, many in the crypto community have begun to view the SEC as overly aggressive and hostile to the industry. Some have even accused the SEC of overreaching and interfering with innovation, while others believe the agency is simply attempting to protect traditional financial institutions from any and all kinds of disruptive forces.

In any case, plenty of investors have started leaving the United States in favor of more crypto-friendly countries like the UAE which has only contributed to the brain drain of the country, and this will continue unless the SEC changes its stance towards crypto going forward.