SEC, New York challenge Binance-Voyager bankruptcy deal

The SEC and New York regulators are opposing Binance.US's $1 billion deal to acquire the assets of bankrupt crypto lender, Voyager, court filings show.

Why it matters: The move is part of a broad crackdown by regulators across the crypto industry.

Details: In a Wednesday filing, the SEC said it was investigating whether the deal violated laws on the offering of unregistered securities.

• The agency added that Binance.US and Voyager failed to make adequate disclosures on potential regulatory issues around the purchase, with Binance reportedly facing its own federal probes.
• "Regulatory actions, whether involving Voyager, Binance.US or both, could render the transactions in the Plan impossible to consummate, thus making the Plan unfeasible," the filing said.

Zooming in: The New York State Department of Financial Services and New York Attorney General Letitia James are also opposing the deal, saying Voyager had been operating illegally in New York before its bankruptcy and therefore "deprived those New York customers of the consumer protections."

• Because Binance.US is not licensed in New York, Voyager customers in the state will not be able to touch their assets for six months after the deals close, or when Binance US obtains the necessary approval —whichever comes first, according to New York's filing.

Of note: 97% of creditors in the deal had voted in favor of the deal as of early Wednesday.

• "We will work with relevant parties to provide any requested information, as Binance US customer assets always remain on the platform, are held on a 1:1 basis and are fully reserved," a Binance spokesperson said in an email.
• Voyager did not immediately respond to a request for comment.

What we're watching: The future of bankrupt crypto lender Celsius, which recently selected NovaWulf as the acquirer of its assets via its Chapter 11 process.