Discover the SEC’s objections to Celsius Network’s reorganization plan in light of the ongoing Coinbase case, shaping the regulatory landscape for cryptocurrency platforms
The US Securities and Exchange Commission has filed an objection to Celsius Network’s reorganisation proposal, citing the SEC’s own ongoing case with cryptocurrency exchange Coinbase.
The SEC filed a limited objection and reservation of rights with the United States Bankruptcy Court for the Southern District of New York on September 22 in response to Celsius’ most recent proposed restructuring plan. The fourth version of the bankruptcy plan, issued on August 15, came after an initial proposal in March but was not approved.
A reorganisation plan supplement proposed a distribution services agreement with Coinbase, which Celsius attempted to file under seal. In its objection, the SEC stated that the transaction may compel Coinbase to “go far beyond the services of a distribution agent,” potentially supplying services at issue in the commission’s civil suit launched in June.
“The Debtors have confirmed that they do not intend for Coinbase to provide brokerage services to the Debtors, despite the language in the Coinbase Agreements to the contrary,” according to the petition. “However, this Court should not be asked to approve a deal where the material terms are missing or inconsistent.”
Celsius’s restructuring plan has been revised since March, while Coinbase is being sued by the SEC for allegedly issuing unregistered securities. Coinbase CEO Brian Armstrong and chief legal officer Paul Grewal announced in a Sept. 25 post on X (previously Twitter) that the exchange was “proud to engage with Celsius” in its attempts to restore user monies.
Celsius filed for bankruptcy after announcing a deal with Core Scientific in which the mining corporation agreed to transfer a mining data centre to Celsius in exchange for $14 million in cash and to settle all current litigation between the two companies. Celsius had fallen behind on payments after declaring bankruptcy in July 2022, according to Core Scientific.
The bankruptcy court permitted Celsius sending out digital ballots in October to vote on the restructuring plan in August. The next hearing in the bankruptcy case is on October 5.
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