The Securities and Exchange Commission (SEC) is throwing a wrench into FTX’s plan to repay its creditors with stablecoins. While the SEC acknowledges the plan might not be illegal, they’re still warning that they could challenge any transactions involving crypto.
SEC’s Overreach?
This move has sparked criticism, with some arguing that the SEC is overstepping its authority. Alex Thorn, Head of Research at Galaxy Digital, calls this “the height of jurisdictional overreach.” He points out that the SEC has already lost similar battles against Paxos and Binance, and that most people, including other regulators, don’t think the SEC should have control over stablecoins.
The SEC’s Stance
The SEC’s stance is that they want to reserve the right to claim stablecoins are “crypto asset securities,” even though they haven’t been able to prove this in court. They seem determined to keep a tight grip on crypto, even if it means blocking legitimate financial tools.
