FTX Repayment Plan in SEC Crosshairs, Stablecoin Use Questioned

  • The SEC reserved the right to challenge creditor repayments made using U.S. dollar-pegged crypto assets.

  • FTX’s current liquidation plan proposes creditor claims based on asset values at the time of bankruptcy.

  • Galois Capital was fined $225,000 for storing client funds on non-qualified platforms, including FTX.

The SEC is taking a closer look at payments made to creditors of the collapsed FTX exchange. This comes as Adam Cochran voiced concerns about SEC oversight failures on social media, pointing out the irony of the agency suing funds for storing assets in FTX while missing major fraud. The SEC had previously engaged with FTX during investigations but failed to uncover the misconduct.

SEC suing a fund for storing funds in FTX is wild.

Sure, the fund allegedly failed to keep funds with a valid custodian but the SEC also failed to identify the largest fraud in history even when actively engaged with and investigating FTX which is why anyone lost funds 😅

Maybe… https://t.co/KofkL5Bova

— Adam Cochran (adamscochran.eth) (@adamscochran) September 3, 2024

Adding to the scrutiny, the SEC warned it could challenge repayments made using stablecoins. In a recent fi…

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