SEC and U.S. Trustee Warn FTX on Stablecoin Repayments

Sep 2, 2024, 04:15 AM

The U.S. Securities and Exchange Commission (SEC) has issued a warning to the FTX estate regarding its plan to repay creditors using stablecoins and other digital assets. The SEC, in collaboration with the U.S. Trustee, has expressed concerns that such payments could face legal challenges, as detailed in a recent court filing. This warning comes as part of a broader scrutiny of FTX's bankruptcy plan, which includes a contentious discharge provision that shields estate administrators and third-party advisors from legal liabilities. The SEC's stance indicates potential legal hurdles for FTX if it proceeds with its current repayment strategy.