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.

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