The SEC will block FTX payouts

Since FTX's collapse in 2022, creditors have been waiting for compensation. Potential repayments in stablecoins could now be blocked by the SEC.

If the FTX-curator pays its creditors compensation in stablecoins, the U.S. stock market watchdog would SEC can object. This is evident from a letter of Aug. 30 to the U.S. Bankruptcy Court in Delaware.

Although a refund in stablecoins is technically legal, they want to retain the right to challenge this possible decision.

In November 2022, the crypto empire founded by Sam Bankman-Fried imploded, resulting in losses of more than US$10 billion to customers. According to the most recent liquidation plan FTX wants to compensate creditors with payments in stablecoins.

"The SEC makes no ruling on the legality of the transactions described in the plan under the federal securities laws and reserves the right to challenge transactions involving crypto-assets," the regulator said.

Alex Thorn sees the reason for this warning in the SEC's attitude toward stablecoins. According to the head of research at Galaxy Digital, the U.S. securities watchdog considers stablecoins to be so-called securities.

Paul Grewal, Chief Legal Officer at Coinbase, has also criticism of the SEC. "Why provide clarity to the market when threats and slander are enough? Investors, consumers and markets deserve better," Grewal said.