SEC official says Binance US is operating an ‘unregistered securities exchange’

A US Securities and Exchange official said the agency’s staff believe Binance US is operating an unregistered securities exchange in the US, and staff believe the VGX token was sold by Voyager Digital. The sale violated federal securities laws.

SEC Senior Trial Attorney William Uptegrove, at a bankruptcy hearing to determine whether Voyager should be sold to Binance US, said he was responding to Judge Michael Wiles of the Southern District Bankruptcy Court in New York, who said at the beginning of the hearing that the SEC had provided little guidance or specifics regarding its objection to the sale of Voyager.

“Employees believe – based solely on the facts and circumstances currently known to Employees – that the offering and sale of VGX tokens has the properties of a securities transaction,” it said. “Employees also believe that Binance US is operating an unregistered securities exchange in the United States.”

The official said the views of the SEC staff do not necessarily reflect the views of the five commissioners who head the agency. He did not say whether the SEC took any enforcement actions related to his announcement.

“The commission has not made any determination on any of these issues,” he said. “do not represent the beliefs of employees [view] of the Commission.”

Typically, enforcement action by the SEC is initiated by the staff, but a majority of commissioners are required to vote in favor of proceeding.

Binance US did not immediately respond to a request for comment.

Uptegrove’s comments echo SEC Chairman Gary Gensler, who has said in the past that he believes most crypto trading platforms should be registered as national securities exchanges, which would allow them to be regulated under the agency’s disclosure and compliance regime. Will see you working.

Voyager plans to sell its assets to Binance as part of its Chapter 11 bankruptcy reorganization plan. The vast majority of Voyager’s creditors – 97% – have supported the proposal, and hearings to discuss the plan are underway for a third day.

Update (March 3, 2023, 23:25 UTC): Adds additional information.

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