Staff at the SEC Think That Binance.US is Running an Unregistered Securities Exchange

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Last Updated on March 4, 2023 by Bitfinsider

During a Voyager Digital bankruptcy hearing on Friday night, a lawyer stated that Securities and Exchange Commission staff think Binance.US is running an unregistered securities exchange in the United States.

William Uptegrove of the SEC expressed worry that the sale and offering of Voyager’s VGX token have characteristics of securities transactions.

During a hearing in the U.S. Bankruptcy Court for the Southern District of New York, Uptegrove stated, “The commission has not made any determination on either of these issues and the staff beliefs do not represent the position of the commission.”  On the basis of staff suggestions, commissioners decide what enforcement measures to take.

The remarks come as the SEC steps up its enforcement of cryptocurrency laws, including last month’s settlement with cryptocurrency exchange Kraken over its staking service and the proposal of stricter regulations for cryptocurrency administrators. No quick comments were made by Binance or Binance.US representatives.

Judge Michael Wiles is deliberating whether to consent to the planned transfer of assets from Voyager to Binance.

US. Wiles rebuffed the SEC’s objection to the transaction on Thursday because the SEC had provided scant supporting documentation.

On Friday night, the commission’s attorney requested a private meeting with the judge, claiming “statutory restrictions on our ability to share nonpublic information.” The judge pressed the commission to make its statements public after a short private discussion involving the SEC, the Voyager debtors, the debtors’ attorneys, and counsel for Binance.US.

Wiles stated: “This is a public court proceeding. Anything that further explains the basis for the SEC’s position, that seems to me is something everybody’s entitled to hear.”

Uptegrove responded by labeling the circumstance a “complicated, complicated situation,” and stating that the commission’s enforcement investigations are confidential.

Because the SEC took no official stance, Wiles claimed he still did not have “very much clarity” even after the SEC lawyer made it clear that the staff thinks Binance is running an unregistered securities exchange. Witnesses have given more than 13 hours of testimony about the planned sale over the past two days.

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