Voyager responds to SEC’s objection, Alameda’s “hypocrisy and chutzpah”

abdelaziz Fathi

Bankrupt crypto lender Voyager Digital has defended its plan to sell assets to Binance.US and responded to objections raised by US state and federal regulator against the $1 billion proposal.

FTX founder and former CEO Sam Bankman-Fried

In a separate filing, Voyager described claims of Alameda Research, the trading arm of bankrupt crypto exchange FTX, as “hypocrisy and chutzpah based on unverified speculation.”

“Raising Disclosure Statement objections based on unsubstantiated and unverified media reports while ignoring the substantial information already made available to the Objectors is a naked attempt to undermine the Binance.US Transaction and attack Binance.US,” the filing added.

Voyager explains that Binance.US’ bid is structurally similar to the FTX US’ proposal. Binance had emerged before as one of the highest bidders for Voyager Digital’s assets. Following FTX’s collapse, Voyager reopened the bidding process and its board was reportedly in active discussions with alternative bidders.

The legal document further states:

“No other transaction proposed to the Debtors as of the date hereof provides better recoveries to creditors on a risk adjusted basis. In addition, the Binance.US Transaction provides (a) the most value currently available for the Debtors’ assets and ultimately to their stakeholders— (b) the fastest route to distributing such value to customers, and (c) the least degree of risk to the Debtors’ stakeholders (and particularly customers) compared to other available alternatives.”

Furthermore, the liquidators explain that Binance.US offer contains a broad “fiduciary out” provision, which allows them to terminate the transaction if a better deal emerges in the future. Additionally, the agreement permits Voyager creditors to “pivot to a toggle transaction” that enables them to return assets to stakeholders if they exercise their fiduciary out.

“If the Debtors pivot to the Toggle Transaction, the Debtors may elect to use Binance.US to provide services to facilitate the Debtors’ self-liquidation, allowing the Debtors to “self-liquidate” without expending additional time, resources, and cash negotiating terms with a new third-party,” they added.

Voyager’s response alleges that doubts expressed by the SEC, alongside financial regulators from New York, Texas and Vermont, regarding Binance’s financial stability are unwarranted. The filing also hit out at Alameda, which had previously attempted to rescue Voyager before going bankrupt itself, saying its attempt to oppose the deal raises “frivolous arguments that exhibit hypocrisy and chutzpah at its finest.”

The statement added that these objections ignore the practical realities and fail to identify any transaction that provides a better outcome for the creditors. Voyager – supported by a committee representing its victims – said FTX US’s cataclysmic collapse not only derailed the chapter 11 cases but sent shockwaves through the cryptocurrency industry.

“The resulting contagion in the market contributed to other key exchanges filing for chapter 11 protection or halting trading and withdrawals on their platforms. Given this, and the resulting prolonged timeline and increased administrative costs of these chapter 11 cases, the Debtors must move quickly to preserve the value of the Debtors’ estates and maximize returns to creditors,” the filing said.

The US top regulator has filed a so-called “limited objection” to the proposed $1.02 billion acquisition, citing the lack of clarity on Binance.US’s ability to close the deal. As such, the SEC wants to get more information on the exchange’s source of funding and the nature of business operations following closure of the deal.

The SEC also wants to know how Binance.US intends to secure customer assets during and after the transaction and how it would rebalance its cryptocurrency portfolio.

In its filing, the SEC said it has already sent its inquiries to Binance.US’s counsel and expects to receive a revised disclosure statement prior to a hearing on the matter.

Read this next

Retail FX

Financial Commission adds Ultima Markets to membership roster

Multi-asset brokerage firm Ultima Markets, operating under the trading name Ultima Markets Ltd, has been granted membership of the Financial Commission, marking the most recent inclusion into the ranks of the self-regulatory organization.

Digital Assets

Bitcoin hits fresh record high amid massive short squeeze

Bitcoin has surged to record highs against both the euro and the pound, hitting €60,447 and £51,736 respectively on Coinbase. The primary cryptocurrency has seen an almost 7% increase in the past 24 hours.

Digital Assets

US court rules crypto trades as securities in Coinbase case

A US court ruled that trading crypto assets on platforms like Coinbase constitutes securities transactions.

Market News

Weekly Data: Oil and Gold: Brief Review before the NFP

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

Institutional FX

FXSpotStream reports lower volumes for February 2024

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for February 2024, which moved lower on a monthly basis.

Fundamental Analysis

Global FX Market Summary: EUR, USD, Gold March 4th,2024

US Dollar Weakness: The US Dollar (USD) is currently struggling to gain strength due to a combination of factors.

Technical Analysis

Bitcoin Technical Analysis Report 4 March, 2024

Bitcoin cryptocurrency can be expected to rise further toward the next resistance level 69000.00 (former multiyear high from January)


Finding Opportunity in Challenge: Why New Regulations Offer a Chance For Business to Get on Top of Data Management

The combination of CESOP, PSD3 and the PSR, has put businesses under new pressures. In this engaging article, André Casterman, Senior Advisor at Intix provides invaluable guidance on how companies can stay ahead of the curve.

Institutional FX

Finalto launches Prime of Prime offering on LSEG’s FX Matching venue

“By combining our expertise in Prime of Prime services with LSEG’s robust trading platform, we aim to empower clients with the tools and resources needed to navigate the FX market with confidence.”