Caution Flags Fly in Texas
The recent proposed deal between Binance.US and the defunct crypto lender Voyager Digital has caught the attention of the Texas State Securities Board and Department of Banking. Their concerns, laid out in a court filing dated February 24, reveal potential pitfalls and inadequacies in the proposition.
Unsecured Creditors in Hot Water
One of the glaring issues highlighted is the treatment of unsecured creditors. It seems Binance.US’s restructuring plan promises a rather paltry recovery rate of only 24%-26% for creditors, significantly less than the 51% recovery they could achieve under Chapter 7 bankruptcy proceedings. Talk about a deal that makes you go “Hmm…”!
Sensitive Information Alert!
In a world where data privacy is king, the terms of service outlined by Binance.US are raising eyebrows. According to the Texas regulators, account holders would be required to consent to transferring their “personally sensitive information” globally to an array of parties as demanded by Binance.US. And lost in the fine print? A clause that effectively strips customers of any legal recourse should any issues arise. Yikes!
Disturbance in the Lone Star State
The objection also points to what some might call a classic case of discrimination against Texas consumers. In a move that seems to disregard the local laws, Texas-based customers may find their digital assets sequestered by Voyager for up to six months post-agreement. This is due to Binance.US not being a supported jurisdiction in Texas, leading many to wonder: is there no love for Texans in this crypto saga?
The Clock is Ticking
With Binance.US attempting to navigate the licensing maze within just six months—a timeline deemed nearly impossible by regulators—Texas consumers stand in limbo. And as they wait, uncertainty looms larger than a Texas-sized armadillo at a barbecue. Could this plan leave them empty-handed?
The SEC Steps In
The timing couldn’t be more crucial. Just days after the Texas filing, the Securities and Exchange Commission (SEC) raised further alarms about the acquisition, hinting at potential violations of securities law. It seems this crypto rollercoaster ride is only just getting started. While Binance.US has remained silent on the developments, the road ahead for the proposed deal appears bumpy at best.
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