Texas Authorities Challenge Binance.US and Voyager Digital Deal

Texas Authorities Object to Binance.US Deal

Texas' State Securities Board and the Department of Banking have raised concerns over a proposed agreement between Binance.US and the bankrupt cryptocurrency lender, Voyager Digital. The objections are rooted in the terms of service and restructuring plan proposed by Binance.US, which Texas authorities argue contain insufficient disclosures.

Recovery Concerns for Unsecured Creditors

One of the primary issues highlighted is the potential recovery rate for unsecured creditors. Under the current plan, creditors could receive a significantly lower recovery of 24%-26% compared to the 51% they might expect under Chapter 7 bankruptcy proceedings. This discrepancy has raised alarms about the fairness and transparency of the proposed deal.

Asset Purchase Agreement Details

In December, Binance.US announced an agreement to acquire Voyager Digital's assets for approximately $1.022 billion. The transaction, however, is under scrutiny due to concerns about the adequacy of information provided to creditors and the overall impact on their financial recovery.

Implications and Next Steps

The objections from Texas authorities could have significant implications for the future of the deal. They underscore the importance of transparency and full disclosure in financial transactions involving distressed assets. The outcome of these objections could influence how similar transactions are structured and scrutinized in the future.

The ongoing legal proceedings and regulatory reviews will determine whether the proposed acquisition will proceed as planned or require modifications to address the raised concerns. This development highlights the complex interplay between regulatory oversight and corporate restructuring within the cryptocurrency sector.