The US Securities and Exchange Commission (SEC) has issued a filing expressing concerns over the proposed repayment strategy in the ongoing FTX bankruptcy case.

The plan, which includes repaying creditors through stablecoins or other digital assets, has prompted the SEC to reserve the right to challenge these transactions

The United States Securities and Exchange Commission (SEC) has filed a motion to block a key provision in the FTX Chapter 11 bankruptcy plan that would have shielded the company from certain future legal liabilities, Reuters reported on Aug. 31.

According to the report, the SEC is seeking to remove a provision in the plan that would discharge FTX from any claims or causes of action arising before the petition date. The regulator argues that this provision could prevent full accountability in the bankruptcy process.

The filing also states that the SEC is reserving the right to object to transactions in the plan that involve the use of stablecoins or other digital assets to repay creditors, adding that such transactions may be subject to federal securities laws.

The move comes as the SEC continues to investigate the collapse of the FTX exchange, which is being liquidated in bankruptcy court after owing money to millions of users. The agency is examining whether any laws were broken in the lead-up to the exchange’s failure.

The SEC’s filing is the latest development in the ongoing FTX bankruptcy saga, which has seen creditors, regulators, and other parties clash over how to proceed. Stay tuned to CryptoSlate for continuing coverage of this breaking story.

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