SEC's Objection to Celsius Network's Bankruptcy Plan Under Scrutiny – Coinpedia Fintech News
Two masterminds on one project—is this what bothers SEC, or are there deeper concerns? The SEC only blocks retail investor benefits while ignoring FTX and other instances.
Legal experts are analyzing the SEC’s move to object to a US company and what the SEC is up to. Coinbase CEO Brian Armstrong and Chief Legal Officer Paul Grewal questioned the SEC’s intention to object to the restructuring plan. Let’s delve in to find out what’s brewing inside the Celsius bankruptcy plan and its consequences.
Legal Experts Criticize SEC’s Objection
Coinbase and the SEC are locked in a dispute over Celsius Network’s bankruptcy strategy. Celsius intends to employ Coinbase to distribute cryptocurrency to international clients and is seeking court approval for a set of agreements with the exchange.
However, the SEC responded that these agreements surpass the scope of a distribution agent, incorporating brokerage and master trading services, aligning with the SEC’s prior concerns against Coinbase for operating as an unregistered broker and exchange. This dispute comes after the SEC’s well notice to Coinbase in March, which led to a lawsuit alleging unregistered brokerage operations.
In response, Coinbase’s Chief Legal Officer questioned the SEC’s objection, emphasizing Coinbase’s integrity in facilitating Celsius’s plan. Another analyst, a DeFi investor known as “CryptoMiami,” decoded that the SEC’s objection is relatively “limited,” revolving around the brokerage and master services agreement. In contrast, Coinbase’s original role was as a distribution agent.
Meanwhile, legal commentator John Deaton has emphasized the SEC’s consistent failure to safeguard retail investors, portraying it as the most significant ongoing threat to their interests.
Since Coinbase is in legal trouble with the SEC, dealing with the firm will bring more trouble than solution.
Celsius has Its Complexities.
Since last year, Celsius has grappled with bankruptcy and is in legal hot water. The SEC has filed a lawsuit, accusing Celsius and its ex-CEO of fraudulent crypto sales and deception. This includes manipulating the value of Celsius’ native token, CEL. Furthermore, objections to Celsius’ plan have resurfaced, with doubts about creditor information for decision-making. This legal turbulence adds complexity to Celsius’ recovery efforts.
Investors Brace for Impact
If this repayment deal is stopped midway, investors may be significantly hurt as many want a quick settlement and praise Coinbase’s bankruptcy plan. However, the SEC prioritizes crypto responsibility even for failing corporations. The court will decide if Coinbase’s agreement meets regulations and creditor interests.
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