Voyager Digital Dismisses SEC Allegations of VGX Token as a Security
The counterclaims filed by the defunct crypto lender Voyager Digital dismissed the US Securities and Exchange Commission (SEC) argument that VGX Token satisfies the elements of security. The attorney representing the bankrupt crypto lender petitioned the court to approve the $1.02 billion offer for its assets by Binance.US.
SEC Allegations Labeled as Lame Delays
The counsel representing Voyager Digital termed the allegations the US SEC lodged as causing unnecessary delays that cost the crypto lender $10 monthly. The March 5 filing before the Southern District Court of New York decried the surprising delays caused by SEC’s shifting position.
Voyager’s counsel submitted that SEC portrayed insincerity in its position on the $1.02 billion acquisition offer by Binance.US. The counsel termed the objections held by SEC denying the parties a speedy resolution, given that it filed for bankruptcy protection in July 2022.
Voyager Disapproving Objections Lodged by SEC as Inconsistent
Voyager’s submission on Sunday disapproved of the assertions lodged by SEC portraying VGX as security. The documents annexed to the filing echoed the statement conveyed by the crypto lenders’ financial adviser Mark Renzi that the debtors voted in favour of the acquisition by Binance.US. Also, the debtors’ view attracted legal support from a reputable law firm.
Renzi tore at the inconsistency portrayed by SEC’s executive William Uptegrove. He observed that the executive failed to declare a position on the VGX’s status in a Thursday, March 2 interview.
Surprisingly, the SEC official would shift position within twenty-four hours in a Friday submission before the court that Binance.US was dealing with an illegal securities exchange. Further, Uptegrove indicated that such instruments warrant registration.
Timing of Supplemental Statement Surprising Debtors Watching Declining Value of Estate
The timing of the supplemental statement conveyed by the SEC’s counsel surprised the debtors. In particular, Renzi disclosed that Voyager had furnished the regulator with the information on the VGX token in mid-2021. The lapsed period of 18 months is reasonable to consider the issues closed, only for them to resurface in 2023.
Renzi submitted that delaying the conclusion of the Voyager-Binance.US deal subjected the debtors to lose $10 million monthly. The filing echoed Renzi’s views that a lengthy legal process would erode funds for distribution to the creditors. Voyager ruled out responsibly delaying the process to accommodate the evolving deliberative process.
SEC’s Objection of Binance.US Considered Vague
In support of Renzi, Judge Michael Wiles illustrated absolute shock at SEC’s vague objection. The crypto lender’s financial advisor reconsidered the SEC’s views to propose modifications to the wording of the Binance.US deal. Nonetheless, such changes were minor to necessitate creditors to take another vote.
Binance.US announced the successful bid to acquire Voyager Digital assets in December. A recent response by Binance Holdings chief executive Changpen Zhao expressed mulling pulling out of the deal.
The leading crypto exchange by volumes traded admitted experiencing regulatory pressure amidst a series of crackdowns targeting its operations. The severity of the situation has prompted speculators to consider Binance contemplating terminating ties with US-based crypto firms, ceasing operations and the buyout deal.
A subsequent tweet by Zhao reaffirmed support for the $1.02 billion deal provided for the acquisition deal provided the regulators approved the purchase. He lauded Binance.US for its devotion to expediting the return of funds to affected users.
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