SEC Objects to Celsius Network's Restructuring Plan Amid Coinbase Lawsuit
Summary:
The U.S. Securities and Exchange Commission (SEC) has formally objected to crypto company Celsius Network's restructuring plan, referring to its existing lawsuit with cryptocurrency exchange Coinbase. Objections were raised to confusion over an ambiguous Coinbase services agreement, where Coinbase could exceed a standard agent role, reflecting key issues central to the SEC's ongoing lawsuit. The objection occurs amid an existing legal dispute with Coinbase over accusations of the exchange facilitating unregistered securities. Meanwhile, Celsius is negotiating a deal with Core Scientific involving the sale of a mining data center to Celsius, helping to close all ongoing litigation between the two firms.
The U.S. Securities and Exchange Commission (SEC) has objected to the restructuring plan of Celsius Network, taking into account its ongoing legal dispute with cryptocurrency exchange Coinbase. The formal objection was lodged on September 22 with the U.S. Bankruptcy Court for the Southern District of New York, where the SEC expressed concerns about Celsius' latest proposed reorganization strategy. Celsius' fourth attempt to revise its bankruptcy plan, initially put forward in March, is yet to receive approval. An amendment to this plan, involving a distribution services agreement with Coinbase, was requested to be submitted confidentially by Celsius. However, the SEC voiced concerns that this arrangement might necessitate Coinbase to extend beyond the basic distribution agent role and deliver services that are central to the regulator's current lawsuit, initiated in June. Despite Celsius' assurances that it doesn't intend for Coinbase to act as a brokerage service for them, the SEC stated that the court shouldn't be asked to sanction a deal with missing or inconsistent key terms. While Celsius has been refining its restructuring plan since March, Coinbase is contending with an SEC lawsuit for allegedly facilitating unregistered securities. On September 25, Coinbase CEO Brian Armstrong and Chief Legal Officer Paul Grewal conveyed their pride in supporting Celsius and questioned the SEC's opposition. Subsequent to the bankruptcy court filing, Celsius publicized an agreement with Core Scientific wherein the miner consented to vend a mining data center to Celsius for a monetary consideration of $14M, thereby resolving all outstanding legal matters between both companies. Core Scientific claimed that since filing for bankruptcy in July 2022, Celsius had failed to make their payments. In August, the bankruptcy court authorized Celsius to distribute digital voting ballots regarding the restructuring plan in October. The next court hearing concerning the bankruptcy case is set for October 5. Additionally, Celsius, FTX, and NY Post have been criticized by Tiffany Fong in her magazine piece, Hall of Flame.
Published At
9/25/2023 6:20:20 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.