The crypto bank Voyager is in bankruptcy due to the collapse of TerraUSD. A potential buyer seems to have been found quickly with Binance. Their machinations are not well received by either the stock exchange supervisory authority or the financial authorities.
The US Securities and Exchange Commission and the New York tax authorities have vetoed a sale of the insolvent crypto bank Voyager to the US subsidiary of the trading platform Binance. The deal could violate the laws governing the offering and sale of unregistered securities, the SEC said.
The New York Department of Financial Services (NYDFS) pointed out that Voyager operated virtual currency transactions without a license, which were therefore illegal. Binance.US and the crypto exchange’s lawyer could not immediately be reached for comment. The SEC, which filed an objection to the acquisition earlier in January, also raised concerns about the safety of customer deposits. It remains unclear whether companies affiliated with Binance.US or third parties could access the funds. In addition, there is no guarantee that the deposits cannot be transferred from the platform.
According to documents and internal reports that became known last week, the parent company Binance had secret access to an account of the supposedly independent subsidiary Binance.US. She withdrew hundreds of millions of dollars. The reason for the transfers and the owners of the funds initially remained obscure.
Binance.US had described this information as outdated at the time. The world’s largest crypto exchange has had trouble with the US authorities in several cases. She is at the center of a money laundering investigation. In addition, the US authorities banned the company from issuing its own digital currency Binance USD, which is linked to the dollar exchange rate. They consider this a security that needs to be registered. Voyager went bankrupt when the cryptocurrency TerraUSD slumped in the spring.
The SEC has accused crypto developer Do Kwon and his company Terraform Labs of defrauding investors. This emerges from documents from a federal court in the southern district of New York. The suspect operated a fraudulent scheme that resulted in a market loss of at least $40 billion, the document said. Do Kwon is the South Korean co-founder and head of Singapore-based Terraform Labs, parent company of crashed stablecoin TerraUSD and cryptocurrency Luna.
The SEC demanded that the defendant face penalties, pay back ill-gotten gains, and refrain from future crypto transactions. The crypto markets came under massive pressure from the collapse of the cyber currency TerraUSD in May 2022 after the stablecoin lost its peg to the dollar. At TerraUSD, the stability mechanism failed when investors lost confidence in freely tradable cyber currency Luna. Terraform was initially unable to comment.
