A US Securities and Exchange Commission representative stated that agency staff believe that Binance.US is operating an unregistered securities exchange in the United States and that Voyager Digital’s sale of VGX tokens violated federal securities laws.
During a bankruptcy hearing to decide if Voyager should be sold to Binance.US, SEC senior trial attorney William Uptegrove said that he was responding to Judge Michael Wiles of the Southern District Bankruptcy Court of New York, who had said at the start of the hearing that the SEC hadn’t said much about why it didn’t want the Voyager sale to go through.
The staff believes that the offering and sale of VGX tokens have the characteristics of a securities transaction and that Binance.US operates an unregistered securities exchange in the United States. The official emphasised that the views of SEC staff do not necessarily reflect those of the five agency commissioners. He did not indicate whether the SEC was planning any enforcement actions related to his declaration.
Typically, the SEC staff initiates an enforcement action, but most commissioners must vote to continue the effort.
“It is regrettable that an SEC staff member would make allegations that Binance.US and platforms like ours are operating an unregistered exchange without specifying the assets listed on our exchange that the SEC considers to be securities,” a Binance.US spokesperson said. “We, along with others in our industry, remain committed to constructive dialogue with regulators and supporting a comprehensive regulatory framework drafted and passed by Congress to ensure innovation continues in the United States.”
Uptegrove’s comments are similar to those of SEC Chairman Gary Gensler, who said that most crypto trading platforms should be registered as national securities exchanges. This would put them under the agency’s disclosure and compliance rules.
Voyager plans to sell its assets to Binance.US as part of its plan to reorganise under Chapter 11 bankruptcy. 97% of Voyager’s creditors agreed with the plan, and a three-day hearing is now going on to discuss it.