SEC raises concerns over Coinbase in objection to Celsius restructuring plan
The United States Securities and Exchange Commission (SEC) has filed an objection to Celsius Network’s reorganization plan based in part on the regulator’s own ongoing lawsuit with crypto exchange Coinbase.
In a Sept. 22 filing in U.S. Bankruptcy Court for the Southern District of New York, the SEC filed a limited objection and reservation of rights over Celsius’ most recently proposed restructuring plan. The fourth revision of the bankruptcy plan, filed on Aug. 15, followed an initial proposal in March but has not been approved.
A supplement to the reorganization plan proposed a distribution services agreement with Coinbase which Celsius sought to file under seal. The SEC claimed in its objection that the deal may require Coinbase to “go far beyond the services of a distribution agent”, potentially providing services at issue in the commission’s civil suit filed 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,” said the filing. “However, this Court should not be asked to approve a deal where the material terms are missing or inconsistent.”
Revisions to the Celsius restructuring plan have been ongoing since March, while Coinbase faces an SEC lawsuit over allegedly offering unregistered securities. In a Sept. 25 X, Coinbase CEO Brian Armstrong and chief legal officer Paul Grewal said the exchange was “proud to engage with Celsius” in its efforts to return user funds:
Coinbase is proud to engage with Celsius to distribute crypto back to its customers. I wonder, why would the SEC object to a trusted US public company taking on this role? We look forward to addressing this with the bankruptcy
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