Crypto Flipsider News – SEC Objects to Binance; Hood Shares Seized; Genesis Needs Time; Celsius Ruling; Hong Kong Issues Stablecoin

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Read in the Digest:

• SEC Objects to Binance U.S. $1 Billion Acquisition Deal for Voyager Assets

• Regulator to Seize $465M of Robinhood (NASDAQ:HOOD) Shares Tied to FTX Founder

• Genesis Tells Investors More Time is Needed to Deal with Financial Woes

• Judge Rules Celsius Network Owns Users’ Funds in Celsius Earn Accounts

• Hong Kong Proposes Digital Hong Kong Dollar Be Issued as a Stablecoin

SEC Objects to Binance U.S. $1 Billion Acquisition Deal for Voyager Assets

The Securities and Exchange Commission (SEC) on January 4th filed a limited objection to the U.S. Binance’s proposed $1.022 billion acquisition of Voyager Digital, citing the exchange’s failure to include necessary information in its disclosure statement.

The SEC questioned the adequacy of Binance’s purchase agreement, specifically on the exchange’s ability to pull off a transaction of that magnitude, its plans on safeguarding customers’ assets, and how it would rebalance Voyager’s crypto portfolio.

The Texas State Securities Board and the Texas Department of Banking also objected to the deal because Binance U.S. and Voyager are not in compliance with the state’s laws, so they are not authorized to conduct business in the state.

They further object to the preferential treatment provided to creditors in certain states. Voyager Digital has been actively looking to salvage its bankruptcy situation since Q4 of 2022 after filing for bankruptcy.

Flipsider:

• Regardless of the filing from the SEC, the bankruptcy court will decide if it approves the deal on January 5th.

Why You Should Care

In a statement last month, the U.S. Committee on Foreign Investment in the United States (CFIUS) said that its review could delay or block the deal.

Regulator to Seize $465M of Robinhood (HOOD) Shares Tied to FTX Founder

U.S. prosecutors are seizing the $465b million worth of Robinhood Markets shares purchased by Sam Bankman-Fried, who is facing charges of fraud in the collapse of the FTX cryptocurrency exchange.

Department of Justice officials told a virtual court hearing in Delaware that the assets could later be subject to forfeiture proceedings as the cases against FTX’s former chief SBF and senior executives Gary Wang and Carolyn Ellison continue.

U.S. Attorney Seth Shapiro told the U.S. Bankruptcy Judge John Dorsey, overseeing the FTX bankruptcy, that the Department of Justice did not believe the shares were the property of a bankruptcy estate. Hence the seizure of the shares.

Silvergate, a lender closely tied to FTX, is one of the companies from which the assets are being retrieved. The report comes a day after a judge in the criminal case against SBF ordered him not to access or transfer any cryptocurrency or assets from FTX or Alameda.

Flipsider:

• On January 3rd, Bankman-Fried pleaded not guilty to eight criminal counts, including wire fraud, securities fraud, and violations of finance laws.

Why You Should Care

The seizures were linked to the DOJ’s ongoing prosecution of Bankman-Fried and not the FTX’s bankruptcy case. The latter is a civil matter.

Genesis Tells Investors More Time is Needed to Deal with Financial Woes

Derar Islim, the interim CEO of troubled cryptocurrency lending firm Genesis Global Capital, on Wednesday, January 4th, told investors that the company needs more time to work out of poor financial health.

Genesis was forced to halt withdrawals in November as an after-effect of FTX’s collapse. Islim explained that while the executives work as quickly as possible, navigating its condition is “a very complex process.”

Before halting withdrawals, Genesis was said to have sought an emergency loan amounting to $1B from investors. However, potential investors pulled out, citing its relationship with Digital Currency Group.

The interim CEO also noted that Genesis would continue to provide updates on meaningful developments, including timing.

Flipsider:

• The letter comes just two days after Gemini’s CEO criticized the CEO of Genesis’ owner — DCG — for their poor handling of the situation.

Why You Should Care

Genesis continues to work with its advisors and clients’ advisors to evaluate options to preserve client assets and move the business forward.

Judge Rules Celsius Network Owns Users’ Funds in Celsius Earn Accounts

Martin Glenn, the federal bankruptcy judge in the Celsius case, has ruled that cryptocurrencies deposited into interest-bearing accounts at the lending platform belong to the firm.

The U.S. Bankruptcy Court Southern District of New York ruling on Wednesday gives Celsius ownership of the $4.2 billion in crypto that users deposited into its high-interest Earn program.

In addition, the court also ruled that the bankrupt crypto lender can sell $18 million worth of stablecoins deposited in its Earn accounts to fund administrative expenses.

Celsius could claim ownership of the crypto assets because of “unambiguous” terms and conditions. These stated that any crypto deposited into Earn Accounts became Celsius’s property.

Flipsider:

• The court verdict contradicts the argument thousands of Celsius investors have had in claiming that their deposited funds were, in fact, theirs.

Why You Should Care

As per the ruling, customers can’t fight to get their funds as “there simply will not be enough value available to repay all Account Holders in full.”

Hong Kong Proposes Digital Hong Kong Dollar Be Issued as a Stablecoin

Lawmakers in Hong Kong have passed a filing proposing that a stablecoin version of the digital Hong Kong dollar be developed by the government and linked to decentralized finance (DeFi) platforms.

Wu Jiezhuang, a member of the e Hong Kong Legislative Council, says developing the nation’s digital Hong Kong dollar into a stablecoin is significant in drawing Web3 startups to the territory.

According to Wu Jiezhuang, the current stablecoins are issued by private entities and haven’t been able to bolster market confidence. This is worsened by the collapse of several stablecoin ecosystems in 2022.

The lawmaker believes that if Kong Kong issues its digital currency as a stablecoin and connects it to DeFi ecosystems, it will allow the Web3 ecosystem to benefit from it and boost virtual asset trading platforms.

Flipsider:

• Hong Kong recently made its Securities and Futures Commission (SFC) responsible for regulating virtual-asset service providers.

Why You Should Care

The proposal also falls into Hong Kong’s plans to build a global hub for crypto assets in a regulated environment.

See original on DailyCoin