The benefits to creditors from an offer from Binance US to buy up bankrupt crypto lender Voyager hinge on a $445 million loan claim by Alameda Research, making the deal potentially not worth bothering with, Texas regulators said in a Friday court filing.

The filing by the Texas banking and securities agencies said that Voyager’s creditors might be better off if the company simply liquidated assets, and warned that would-be buyer Binance US may be illegally offering securities via its staking program.

“If Alameda is successful in proving its administrative expense claim … recovery could be decreased from 51% to 24%-26%—an amount much lower than what the general unsecured claimants are estimated to receive in a Chapter 7 liquidation,” said the Friday filing, which was also backed by securities regulators from New Jersey.

Voyager lawyers have said the Binance US deal has significant creditor support, but the Texas filing says they weren’t sufficiently warned about the risks of Alameda, the trading arm of collapsed crypto exchange FTX, successfully clawing back loan repayments made before its own November bankruptcy.

The Binance US deal, worth $1.02 billion, should also be quashed because customers weren’t warned personal data could be transferred to underregulated overseas jurisdictions, said the filing.

Binance concerns

The document, filed in a bankruptcy court in the southern district of New York, also detailed concerns over Binance’s business model.

"Binance US’ staking program differs from traditional crypto staking and appears to constitute an illegal securities offering,” Joe Rotunda, Director of Enforcement at the Texas Securities Board, said in a statement.

Those comments follow enforcement action against crypto exchange Kraken, which had to pay a multi-million dollar fine to the U.S. Securities and Exchange Commission (SEC) earlier this month, and agree to end staking-as-a-service in the country.

“While Binance US has affirmatively represented to its customers that it was working on getting licensed in Texas, Binance US has never applied for a license with the SSB [State Securities Board] and, after a year, abandoned its license application with the DOB [Department of Banking] after failing to submit sufficient financial information,” the Friday court filing said.

The terms of use Voyager customers must sign up to “may even effectively permit Binance.com to act in the U.S. even though Binance.com purportedly does not deal with U.S. customers,” it added.

The deal has also been opposed by the SEC and by the Federal Trade Commission, which said it was probing allegations of deceptive marketing by Voyager before it filed for bankruptcy in July. A hearing is scheduled for Mar. 2.

CoinDesk has reached out to Binance US for comment.

Read more: Voyager to Hold Onto $445M of Alameda Loan Repayments Pending Court Order or Settlement