Coinbase’s chief legal officer, Paul Grewal, challenges the SEC’s unclear guidance on FTX’s proposal to repay creditors in cryptocurrencies, highlighting ongoing frustration in the crypto community.
Bollywood Fever: Coinbase’s chief legal officer, Paul Grewal, has publicly criticized the U.S. Securities and Exchange Commission (SEC) for its ambiguous stance on FTX’s proposal to repay creditors using stablecoins or other cryptocurrencies.
Although the SEC did not explicitly declare these transactions illegal, it reserved the right to contest them, causing frustration and concern within the crypto community over the lack of clear regulatory guidance.
Grewal’s comments came after the SEC submitted a filing on Friday, reserving its rights regarding the approval of FTX Trading Ltd.’s Joint Chapter 11 Plan in the U.S. Bankruptcy Court for the District of Delaware.
The SEC’s filing stated that the agency was not taking a definitive position on the legality of the transactions under federal securities laws but retained the right to challenge any transactions involving crypto assets.
Expressing his frustration, Grewal took to social media platform X on Sunday, questioning the SEC’s approach. “The SEC didn’t outright state that such an action would be illegal,” Grewal noted, adding, “Why offer clarity to the market when threats and ambiguities suffice?” He went on to emphasize the need for better regulatory transparency, stating, “Investors, consumers, and markets deserve better. Way better.”
Grewal’s remarks underscore the ongoing dissatisfaction within the crypto industry regarding regulatory uncertainty.
The SEC has been criticized for not providing clear guidance, leaving market participants in a state of ambiguity.
The SEC has accused FTX’s founders of defrauding equity investors and platform users. As FTX undergoes liquidation, it plans to sell assets and may distribute stablecoins to creditors.
However, the SEC has not yet taken a definitive legal stance on these crypto asset transactions and maintains the right to challenge them under federal securities laws.
Additionally, the SEC has requested modifications to FTX’s liquidation plan, including the removal of a discharge provision, and has reserved the right to oppose the plan if these changes are not implemented.
This situation highlights the growing demand within the crypto community for more straightforward regulatory guidance from federal authorities, as industry players navigate the complexities of compliance and legal interpretation.
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