During a hearing into the bankruptcy of collapsed crypto lender Voyager Digital, a US Securities and Exchange Commission (SEC) official believes Binance.US has been operating with unregistered securities.
The US subsidiary of Binance – which the SEC is attempting to block the exchange from a $1bn acquisition of Voyager – was believed to be circulating Voyager VGX tokens which have already violated federal security laws in the past.
Whilst one SEC official has claimed Binance.US is operating unregistered securities, this may not be the same reflection as other high-ranking members of the US financial regulator, with no plans to charge Binance.US as of yet.
The SEC’s Senior Trial Attorney, William Uptegrove, reiterated that staff beliefs “do not represent the (view) of the commission”, and confirmed the SEC has “not made any determinations on either of these issues”.
Uptegrove continued: “The staff believes – based solely on the facts and circumstances currently known to the staff – that the offering and sale of VGX tokens has the attributes of a securities transaction.
“The staff also believes that Binance.US is operating an unregistered securities exchange in the United States.”
The SEC has become increasingly vigilant in stamping out cryptocurrencies and exchanges on tokens they deem to be listed as unsecured or unregistered securities, with its head Gary Gensler, calling for crypto exchanges to be listed as national security operators, falling under the same guidelines as regular financial services.
Uptegrove was present at the Voyager bankruptcy hearing with his comments coming in response to Bankruptcy Court Judge Michael Wiles’ comments that the SEC has not provided any concrete specifics as to why the agency is against Binance.US’ acquisition of Voyager.
Wiles commented: “You come here and tell me that I should stop everybody in their tracks because you might have an issue. It’s kind of a weird objection.”
“I get the feeling that this objection has been made as a kind of cover, so you can say later that we’ll see we raised these issues. You haven’t really, you have done nothing, I need to know specifics.”
In response to the unregistered securities allegations, Binance.US said that the SEC’s allegations are “regrettable” but continue to remain in “constructive dialogue” with senior regulators.
“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,” stated a Binance.US spokesperson.
“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.”