According to a representative of the U.S. Securities and Exchange Commission, the staff at the agency believes that Binance.US is running an unregistered securities exchange in the country and that Voyager Digital sold VGX tokens in violation of federal securities laws.

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

“The staff believes based solely on the facts and circumstances currently known to the staff – that the offering and sale of VGX tokens has the attributes of a securities transaction. The staff also believes that Binance.US is operating an unregistered securities exchange in the United States.”

The representative noted that the opinions of the SEC staff may not always correspond to those of the agency’s five commissioners.  He omitted to mention whether the SEC was considering taking enforcement action as a result of his statement.

“The commission has not made any determinations on either of these issues. The staff beliefs do not represent the view of the commission,” he stated.

Usually, the staff of the SEC initiates an enforcement action, but for it to move forward, a majority of the commissioners must approve it.

“It is regrettable that an SEC staff member would make allegations, that Binance.US and platforms like ours are operating an unregistered exchange, without specifying the assets listed on our exchange that the SEC considers to be securities,” a Binance.US spokesperson said. 

“We, along with others in our industry, remain committed to constructive dialogue with regulators and supporting a comprehensive regulatory framework drafted and passed by Congress to ensure innovation continues in the United States.”

Uptegrove’s remarks concur with those of SEC Chair Gary Gensler, who has previously expressed the opinion that most cryptocurrency trading platforms ought to be registered as national securities exchanges so that they can operate under the agency’s disclosure and compliance framework. 

As part of its Chapter 11 bankruptcy restructuring plan, Voyager intends to sell its assets to Binance.US. The proposal has received 97% of the votes from Voyager’s creditors, and the hearing to discuss the plan is about to enter its third day.