Paul Grewal, Chief Legal Officer at Coinbase, has publicly accused the U. S. Securities and Exchange Commission (SEC) of not being clear on whether or not FTX’s proposal to repay creditors in stablecoins or digital assets should go forward. Grewal stated his concerns on X, pointing to the SEC, which he said has continued to provide the market with many gray areas that he thinks are not healthy for the growth of cryptocurrencies.
Recently, the SEC released a letter to the FTX estate informing it that it may not support the use of stablecoins or other forms of crypto to repay creditors. However, the agency only prevented the latter from promoting the event by using such actions as those that were illegal, which remains not stated. However, the SEC only said that the commission still has the right to sue or oppose any transaction involving crypto assets – the legal use of FTX’s proposal remains unknown.
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Grewal’s Criticism of the SEC’s Approach
Grewal felt frustrated when responding to SEC’s notice and went to X to express his anger. So, he accused the SEC of failing to issue legal directions regarding using FTX’s proposed repayment strategies. Grewal pointed out that such an ambiguous strategy is destructive for the markets, saying, “Why provide clarity to the market when threats and aspersions will do?” Gaveal himself and other crypto industry representatives are dissatisfied with the numerous attacks by the SEC on the cryptocurrency market.
As has been said above, Grewal pointed out that the approaches of actions by the SEC that continue to issue coded messages and potential threats of enforcement have been counterproductive in creating a more stable and structural market environment. Speaking to investors, consumers, and markets, he said: “You deserve better,” He urged the regulatory body to provide more definite and clear guidance.
The position of the SEC has multiplied the challenges that constitute the FTX bankruptcy, accompanied by multiple proposals aimed at getting the most significant return for creditors. Such ideas have included launching the FTX exchange anew and offering tradable tokens for creditor rights. Nonetheless, FTX has decided to repay creditors in cash or stablecoins while disregarding the plan to reopen the exchange because of low investor interest.
Conclusion
Grewal’s criticism shows the growing tension between the SEC and the crypto industry. As the FTX bankruptcy proceedings continue, the demand for clearer regulatory guidance is becoming increasingly urgent. The crypto industry is looking to the SEC for more transparency, as the current ambiguity threatens to stall progress and create further market instability.
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