$1B Voyager-Binance deal benefits cut in half if Alameda loan claim succeeds: Texas Regulators

The benefits to creditors from an offer by Binance US to buy up bankrupt crypto lender Voyager hinge on a $445 million loan claim from Alameda Research, making the deal potentially not worth bothering with, Texas regulators said in a court filing on Friday.

The filing from Texas banking and securities agencies said Voyager’s creditors may be better off if the company simply liquidates assets, and warned that potential buyer Binance US could illegally offer securities through its staking program.

“If Alameda is successful in proving its claim for administrative expenses … the recovery could be reduced from 51% to 24% – 26% – an amount much lower than what the general unsecured creditors are expected to receive in a Chapter 7 liquidation,” said Friday. filing, which was also supported by New Jersey securities regulators.

Voyager lawyers have said the Binance USA deal has significant creditor support, but the Texas filing says they were not adequately warned about the risk of Alameda, the trading arm of collapsed crypto exchange FTX, succeeding in defaulting on loan repayments made before its own Bankruptcy in November. .

The Binance US deal, worth $1.02 billion, should also be voided because customers were not warned that personal data could be transferred to under-regulated foreign jurisdictions, the filing said.

The document, filed in a bankruptcy court in the Southern District of New York, also detailed concerns over Binance’s business model.

“Binance US’s betting program differs from traditional crypto betting and appears to constitute an illegal securities offering,” Joe Rotunda, Director of Enforcement at the Texas Securities Board, said in a statement.

These comments follow enforcement action against crypto exchange Kraken, which had to pay a multi-million dollar fine to the US Securities and Exchange Commission (SEC) earlier this month and agree to end staking-as-a-service in the country.

“While Binance US has confirmed to its customers that it was working on getting licensed in Texas, Binance US has never applied for a license with SSB [State Securities Board] and after a year left the license application with the DOB [Department of Banking] after failing to submit sufficient financial information, Friday’s court document said.

The terms of use Voyager customers must register to “may even effectively allow Binance.com to trade in the US even though Binance.com allegedly does not deal with US customers,” it added.

CoinDesk has reached out to Binance US for comment.