SEC Objects To Coinbase's Service Provision To Celsius
On September 23, the U.S. regulator filed objections in the Bankruptcy Court for the Southern District of New York to portions of Celsius' reorganization plan involving Coinbase, citing in part Coinbase's litigation against the SEC.
The U.S. Securities and Exchange Commission has expressed concern that bankrupt Celsius has chosen Coinbase to provide cryptocurrency services as part of its reorganization. The statement said Celsius intends to use Coinbase to pay out funds to affected customers.
The regulator believes Coinbase is overstepping its role in the case. The SEC pointed out the inconsistency of Celsius' statement. The lender has indicated that it does not intend to provide brokerage services to Coinbase, but their agreement suggests otherwise. The SEC believes there is an additional agreement between the companies that they are silent about and is demanding that they provide it to the court and regulator.
The regulator also cited Coinbase's intent to provide the controversial services that are at issue in the SEC's lawsuit against Coinbase.
On September 25, Coinbase's legal director Paul Grewal reacted to the regulator's statement.
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 court and undertaking our important role to make… https://t.co/5i1aJDiPXp
— paulgrewal.eth (@iampaulgrewal) September 25, 2023
He underlined the importance of cooperation between the exchange and the lender. He does not understand why the regulator opposes this cooperation, because Coinbase will deal with this issue within the framework of the Celsius bankruptcy procedure. In addition, the majority of Celsius customers supported the Coinbase deal between Celsius in the last vote.
Brian Armstrong Gary Gensler Coinbase Exchange
