A US Securities and Exchange official said that agency staff believe Binance US operates an unregistered securities exchange in the United States and that staff believe Voyager Digital’s sale of VGX tokens violates federal securities laws has.
William Uptegrove, the SEC’s senior trial attorney, said at a bankruptcy hearing to determine whether Voyager should be sold to Binance US, he was responding to Judge Michael Wiles of the Southern District Bankruptcy Court in New York, who said at the beginning of the hearing the SEC had provided few clues or details regarding their objection to the Voyager sale.
“Based solely on the facts and circumstances currently known to the staff, the staff believe that the offering and sale of VGX Tokens has the characteristics of a securities transaction,” he said. “Staff also believe Binance US operates an unregistered securities exchange in the United States.”
The official noted that the views of the SEC staff do not necessarily reflect the views of the five commissioners at the top of the agency. He did not say whether the SEC had any enforcement action in the works related to his statement.
“The Commission has not made any determinations on any of these points,” he said. “The beliefs of the employees do not represent them [view] the Commission.”
Typically, an enforcement action by the SEC is initiated by staff, but a majority of commissioners must vote in favor of it to proceed.
Binance US did not immediately respond to a request for comment.
Uptegrove’s comments align with SEC Chairman Gary Gensler, who has said in the past that he believes the majority of crypto trading platforms should be registered as national securities exchanges so that they are subject to the Disclosure and Compliance regimes of the agency would operate.
Voyager plans to sell its assets to Binance as part of its Chapter 11 bankruptcy restructuring plan. The vast majority of Voyager’s creditors — 97% — have backed the proposal, and a hearing to discuss the plan enters its third day.
UPDATE (March 3, 2023, 23:25 UTC): Adds additional information.