The U.S. Securities and Exchange Commission (SEC) is signaling potential objection to FTX’s proposed plan to repay creditors with stablecoins.
In a new official court filing, the SEC acknowledges that FTX’s Chapter 11 repayment plan may not be illegal while maintaining that the regulatory agency has the right to challenge any transactions involving crypto.
“The SEC is not opining as to the legality, under the federal securities laws, of the transactions outlined in the Plan and reserves its rights to challenge transactions involving crypto assets.”
The SEC’s warning has drawn criticism from critics arguing that the agency may be overstepping its regulatory authority.
Says Galaxy Digital Head of Research Alex Thorn on the warning,
“The SEC is again reserving the right to claim dollar-backed stablecoins are ‘crypto asset securities,’ despite dropping their enforcement against Paxos and losing their MTD on BUSD against Binance in July
this is the height of jurisdictional overreach
it’s quite absurd if you think about it. no one, including most other regulators and both parties, thinks the SEC should have oversight of genuine ‘number stay flat’ technologies
the SEC doesn’t even make a case here. they are just unwilling to let it go. it’s a bludgeon they must keep sharp, lest any legitimate actors deign to wield these (boringly above-board) instruments.”