Voyager Denies SEC Claims VGX Token Is Security as Binance US Decision Looms

Voyager Digital has denied claims from the U.S. Securities and Exchange Commission (SEC) that its VGX token is a security, as it seeks court approval for a $1.02 billion offer from Binance US to buy up the bankrupt crypto lender.

Delays to the deal are costing the company $10 million per month, a Sunday court filing on behalf of Voyager said, expressing surprise at delays and evolutions in the SEC’s position on the matter, and urging a speedy resolution to the bankruptcy case.

The Voyager group “disagree with any assertion, by SEC staff or otherwise, that VGX is a security, and the Debtors’ view is supported by a legal opinion from a nationally recognized law firm,” said a statement by Mark Renzi, Voyager’s financial advisor.

Renzi cites CoinDesk reporting of remarks by the SEC’s William Uptegrove, who first on Thursday declined to take a position on VGX’s status, and then on Friday told the court SEC staff believe Binance US is running an illegal securities exchange because financial instruments should be registered with the regulator. The statement did not reflect the views of the SEC commissioners, Uptegrove said.

“This supplemental statement from the SEC’s counsel was a surprise to the Debtors,” Renzi said. He added Voyager had given the regulator information on VGX on the topic around one and half years ago, and hence might reasonably have considered the matter closed.

“The Debtors are burning more than $10 million a month” until the deal is finalized, the filing said, so a longer legal process means less funds for creditor distributions. “The Debtors cannot responsibly delay any further to accommodate the SEC’s apparent evolving deliberative process.”

While bankruptcy judge Michael Wiles on Thursday said he was “absolutely shocked” by the vague nature of the SEC’s objection, Renzi has now proposed modifications to the exact wording of the deal, which he said were sufficiently minor that no further creditor vote is needed.

Binance US announced its planned acquisition in December, but in response to SEC revelations at recent hearings, Binance’s chief executive officer Changpeng “CZ” Zhao tweeted that he might “pull out.”

Shortly after CZ clarified in a further tweet that he is “still in support of the deal and helping returning funds to users as quickly as possible, if allowed to do so.”

The hearing to approve the deal, held in a Southern District of New York courtroom, enters its third day Monday.

Source