Axios Pro: Fintech Deals

January 05, 2023

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Good morning, fintechies. Welcome to Thursday.

Situational awareness: New York Attorney General Letitia James today filed a lawsuit against former Celsius CEO Alex Mashinsky, alleging he made false and misleading statements to investors and misrepresented Celsius' deteriorating financial condition.

1 big thing: SEC objects to Voyager deal

Illustration of a sad face on a digital, pixelated coin

Illustration: Annelise Capossela/Axios

The U.S. Securities and Exchange Commission has filed a limited objection to Binance.US’ proposed $1 billion takeover of bankrupt crypto lender Voyager Digital, according to a bankruptcy filing Wednesday, Ryan writes.

Why it matters: The SEC’s intervention shows regulators will be more skeptical of crypto deals like this moving forward, especially following the collapse of Voyager’s previous would-be acquirer, FTX.

Details: In its filing, the SEC said it seeks more detail on how Binance.US would finance the deal and how it would operate after the deal's close.

  • The agency cited Binance.US’ failure to show an ability to “consummate a transaction of this magnitude… including the nature of [its] business operations after the acquisition.”
  • It claimed Voyager failed to provide sufficient detail regarding how it would secure customer assets to prevent theft or loss.
  • And finally, the regulator said Voyager hasn’t shown how it might rebalance its portfolio if the transaction is not completed in the expected time frame.

💭 Our thought bubble: It's hard to fault the SEC for wanting to see receipts after FTX, which had previously won the bankruptcy sweepstakes for Voyager's assets, collapsed like a house of cards.

  • In particular, the lack of transparency around FTX's assets will undoubtedly cause regulators to rethink how they evaluate crypto deals in the future.

What they’re saying: "A diligent review of the deal is to be expected and welcomed,” a Binance.US spokesperson said when asked for comment. “We will work with the relevant parties to provide any requested information… and look forward to completing the transaction and bringing Voyager customers to Binance.US.”

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