<ul>
 <li>The SEC reserves the right to challenge the legality of FTX's plan to repay creditors using stablecoins.</li>  
 <li>FTX's repayment plan involves compensating creditors with $14.5B-$16.3B by May 2024, raising SEC concerns.</li>  
 <li>The SEC's scrutiny of FTX's use of stablecoins highlights regulatory uncertainties that may impact future crypto cases.</li> 
</ul>  
<p>The US Securities and Exchange Commission recently expressed concern about the anticipated distribution of funds to FTX creditors. The bankrupt cryptocurrency exchange, which collapsed in November 2022, had planned to repay its creditors using stablecoins. However, the SEC raised concerns about the potential legal implications of this approach.</p>  
<h2 class="wp-block-heading" id="h-sec-s-reservations-about-the-plan"><strong>SEC's reservations about the plan</strong></h2>  
<p>In a court document issued on Friday, the SEC stated that it reserves the right to contest the legality of cryptocurrency transactions under federal securities laws.</p>  
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper">
  https://twitter.com/CryptoNellyAi/status/1830769634628206871
 </div>
</figure>  
<p>The regulator noted that the <a href="https://ftx.com/" target="_blank" rel="noopener noreferrer nofollow">FTX</a> estate administrators have yet to identify the distribution agency in charge of disbursing the stablecoins to creditors. The uncertainty complicates the ongoing bankruptcy proceedings.</p>  
<p>The plan <a href="https://cryptonewsland.com/16b-ftx-stablecoin-liquidity-could-trigger/" target="_blank" rel="noopener noreferrer nofollow">proposed</a> by FTX aims to compensate creditors with an amount ranging between $14.5 billion and $16.3 billion by May 2024. The approved restructuring plan allows debtors to <a href="https://cryptonewsland.com/ftxs-bankruptcy-saga-reaches-conclusion-as-restructuring-plan-offers-creditors-118-exceeding-expectations/" target="_blank" rel="noopener noreferrer nofollow">obtain</a> up to 118% of their claims in cash.&nbsp;</p>  
<p>However, this is only applicable to creditors with claims under $50,000. The possible use of stablecoins as part of the payment process has generated concerns, particularly in light of recent SEC statements.</p>  
<h2 class="wp-block-heading" id="h-ongoing-debate-on-stablecoins"><strong>Ongoing Debate on Stablecoins</strong></h2>  
<p>The SEC's stance on stablecoins has <a href="https://cryptonewsland.com/sec-may-target-stablecoins-and-defi-next-report/" target="_blank" rel="noopener noreferrer nofollow">caused</a> controversy in the cryptocurrency market. In August, the SEC proposed that stablecoins pegged to the US dollar be categorized as currency alongside other financial assets such as bank deposits. However, the most recent filing indicates that the SEC remains hesitant about considering stablecoins as equivalent to cash.</p>  
<h2 class="wp-block-heading" id="h-broader-implications-for-the-cryptocurrency-industry"><strong>Broader implications for the cryptocurrency industry</strong></h2>  
<p>The SEC's ongoing investigation into FTX's repayment arrangement illustrates the greater regulatory uncertainty surrounding stablecoins. The agency's actions may establish a precedent for how other bankrupt cryptocurrency companies handle their debts to creditors.</p>  
<p>As FTX proceeds with its repayment plan, the SEC's concerns highlight the need for clarity in the regulatory framework governing stablecoins.</p> 
<p>The post <a href="https://cryptonewsland.com/sec-raises-concerns-over-ftxs-plan/" rel="noopener noreferrer nofollow">SEC Raises Concerns Over FTX’s Plan to Pay Creditors in Stablecoins</a> appeared first on <a href="https://cryptonewsland.com" rel="noopener noreferrer nofollow">Crypto News Land</a>.</p>

SEC Raises Concerns Over FTX’s Plan to Pay Creditors in Stablecoins

Table of Contents

Crypto News Land

Other articles published on Sep 3, 2024

Bored Ape Tops In Daily NFT Sales Volume With +$800K

Starlink confirms it will block access to X in Brazil

Investors Face Challenges in Altcoin Market

Over $1b worth of Bitcoin left exchanges in 7 days

Ripple CLO Shows That SEC Contradicts Itself

Tron Network Outperforms Top Blockchain In Fee Collection During August!

Join our free newsletter for daily crypto updates!