Binance.US’s plan to buy over $1 billion worth of assets that had belonged to bankrupt cryptocurrency lending company Voyager Digital has met with opposition from the United States Securities and Exchange Commission (SEC) .

The Securities and Exchange Commission (SEC) is of the opinion, as indicated in a document filed on February 22 with the United States Bankruptcy Court for the Southern District of New York, that certain aspects of the asset restructuring plan from Binance.US’ acquisition may violate securities law.

The Securities and Exchange Commission (SEC) has opened formal investigations into whether Binance.US and other associated debtors have violated anti-fraud, registration, and other requirements of federal securities laws. The Securities and Exchange Commission expressed particular concern for the safety of the assets during the course of the planned purchase.

The SEC contends that the information provided in the planned purchase of Voyager’s assets does not adequately describe whether Binance.US or affiliated third parties will have access to client wallet keys or control over anyone with access to such wallets. The SEC’s argument is based on the fact that the information was provided in connection with Voyager’s planned asset purchase.

Furthermore, the lawsuit claims that inadequate measures have been provided to ensure that user assets are not moved off of the Binance.US platform. Furthermore, the SEC maintains that Binance.US has failed to disclose its internal controls and processes that are designed to protect its clients’ assets.

The Securities and Exchange Commission (SEC) has requested that Binance.US address these concerns by providing information about who has access to customer funds and the necessary controls after the transaction has been executed.

The first phase of Binance.strategy US’s disclosure statement for its Voyager offering is the main focus of the SEC’s attention right now. The US regulator’s main concern is that the company will retain the right to sell bitcoins belonging to Voyager for distribution to account holders. However, the company will not make use of this power.

On the other hand, “however, the Debtors (Binance.US) have yet to establish that they would be able to enter into such transactions pursuant to federal securities laws.”

According to the petition, a number of different cryptocurrency transactions will need to be made to rebalance the money before it can be redistributed to account holders. The SEC believes that these transactions may violate certain provisions of the Securities Act.

The regulatory body maintains that the disclosure statement provided by Binance.US and the other debtors does not address the likelihood of these transactions violating applicable laws. It is hypothesized that this possibility could have an effect on the estimated 51 percent of the recovered money that was distributed to Voyager account and claim holders.

In the filing, there is a footnote that discusses the possibility of Voyager buying and then selling certain digital assets to rebalance its asset holdings. The possible sale of Voyager Tokens (VGX), which were issued by Voyager, has been brought to the attention of the SEC because it “may constitute an unregistered offer or sale of securities under federal law.”

According to the SEC, there is a possibility that Binance.US is performing the functions of an exchange in violation of the laws currently in effect under the Exchange Act. If this is the case, Binance.US is breaking the law because it is not registered as a national exchange and does not have an exemption from these requirements.