SEC Raises Concerns Over FTX’s Creditor Repayment Plan

A recent submission by the SEC cautions FTX that the agency may oppose any efforts to repay creditors using stablecoins or other digital currencies.

During the FTX bankruptcy proceedings, several options were explored to optimize creditor recovery. These included the potential relaunch of the FTX exchange and the possibility of converting creditor claims into tradable tokens.

In its latest filing, the SEC raised concerns regarding FTX’s proposed refund strategy.

The filing makes it clear that, although the SEC hasn’t outright declared the suggested transactions as illegal, it has reserved the right to challenge them. The SEC specifically questioned the legality of repaying claims or earning profits from FTX’s crypto holdings.

READ MORE:

US Banks Face Lawsuits Over Alleged Misleading Cash Management Practices

Moreover, the filing criticizes the plan for lacking clarity on how the stablecoins would be allocated if the plan is approved.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.