The State Securities Board and the Texas Department of Banking have filed an objection to the proposed settlement between Binance.US and crypto lender Voyager Digital, which filed for bankruptcy in the US in December 2021. The objection, filed on Feb 24, cites “insufficient” disclosures in Binance.US’ terms of service and restructuring plan, including failure to inform unsecured creditors that they can only receive a 24-26% recovery rate under the plan, compared to the 51% they would receive under Chapter 7.

Binance.US had revealed its agreement to purchase Voyager Digital’s assets for $1.022 billion in December, a move that was expected to significantly expand its presence in the US crypto market. However, objection from crypto regulatory bodies Texas could pose a major hurdle to the deal.

The objection raises concerns that the proposed transaction may not be in the best interest of Voyager Digital’s creditors, who may receive far less than they would under the Chapter 7 process. In addition, the objection notes that the disclosures provided by Binance.US they may not be sufficient to allow creditors to make an informed decision about whether to support the proposed settlement.

Binance.US has yet to comment on the objection, but the company is likely to face additional regulatory hurdles in the US as it looks to expand its operations. The objection from Texas regulators highlights the challenges crypto businesses may face navigating the complex and evolving regulatory landscape in the US, where different states may have different rules and requirements.

Overall, the objection by the Texas State Securities Board and Department of Banking to the Binance.US and Voyager Digital settlement underscores the importance of thorough disclosures and transparency in the cryptocurrency industry. As regulators continue to scrutinize the sector, it will be important for companies to provide clear and complete information to all interested parties to build confidence in the market.