Binance.US Transaction Opposed by Texas Securities Commission and Banking Department

02/27/2023 01:40 • AI Insights • 74 views

On February 27, according to a court document on February 24, the Texas Securities Commission and the banking department opposed the proposed transaction between Binance.US and the bankrupt cryptocurrency lender Voyager Digital. According to the document, Binance.US’s terms of service and restructuring plan contain many “insufficient” disclosures, including the failure to fully inform unsecured creditors. According to the plan, they may only get 24% – 26% of the recovery, rather than 51% of the recovery according to Chapter VII.

Texas opposes the proposed transaction between Binance.US and Voyager due to insufficient disclosure of terms and restructuring plan

Analysis based on this information:

The proposed transaction between Binance.US and the bankrupt cryptocurrency lender Voyager Digital has been opposed by the Texas Securities Commission and Banking Department. According to a court document dated February 24, Binance.US’s terms of service and restructuring plan lacked adequate disclosures, including a complete lack of information for unsecured creditors, which is a violation of Chapter VII. The restructuring plan offered by Binance.US limits the recovery for unsecured creditors to 24% – 26%, a much smaller percentage than the 51% typically allowed under Chapter VII.

This is not the first time Binance.US has run into regulatory trouble. Last year, the company had to leave New York due to regulatory issues. This time around, the company’s lack of transparency and insufficient disclosures have caused concern among regulators in Texas. By not providing unsecured creditors with sufficient information, Binance.US is potentially putting these creditors at a disadvantage. This could hurt the company’s reputation, especially if it continues to have regulatory problems.

The opposition to the proposed transaction could have a big impact on Binance.US’s future. If the company is unable to move forward with the deal, it may need to find another way to restructure its debts or possibly even file for bankruptcy itself. This could be a huge setback for the company, which has been expanding rapidly over the last few years. If the opposition is successful, it could also lead to stricter regulations for cryptocurrencies in Texas and other states.

In conclusion, the opposition by the Texas Securities Commission and Banking Department to the Binance.US and Voyager Digital transaction is a sign of the increasing scrutiny cryptocurrency companies are facing. Binance.US’s lack of transparency and insufficient disclosures are potentially putting unsecured creditors at a disadvantage. This may hurt the company’s reputation and could have a big impact on its future. The outcome of the case may also have wider implications for the cryptocurrency industry in Texas and beyond.

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