In a recent ruling on Monday, September 25, the US Securities and Exchange Commission (SEC) displayed unease towards the crypto firm Celsius Network‘s proposal to draft in Coinbase as a part of its rejuvenation plan.
Celsius Network announced last Friday its agenda to utilize Coinbase as an aid in allocating digital assets to its worldwide users and is awaiting court approval. Details of the Coinbase Prime Broker Agreement were revealed, outlining that Coinbase would supply both brokerage services and master trading services to Celsius.
SEC, however, presented resistance, demanding this agreement be placed under a more rigorous examination. The SEC suspects that the relationship suggested by the agreement may result in further legal complications. This apprehension emanates from an ongoing lawsuit by the SEC against Coinbase, alleging it is functioning as an unregistered securities exchange, thus infringing on federal securities law.
Further complications arise as the SEC noted that Celsius’s paperwork contradicts itself. The SEC emphasized there is another undisclosed agreement with Coinbase which they were not appraised of and argued that it should be disclosed to the court. This has led to the SEC requesting the formulation of a new agreement to clarify the exact nature of the association between Celsius and Coinbase.
Addressing the situation, Paul Grewal, Coinbase’s chief legal officer was confident with the ongoing process and boggled about the SEC’s objection towards a trustworthy US public corporation taking a vital part in this process. Grewal stated that Coinbase eagerly anticipates addressing the court and embarking on their significant role to restore Celsius’s customers.
A backdrop to this is the lawsuit against Celsius and its former CEO, Alex Mashinsky. In the mid-2022s, Celsius had to file for bankruptcy due to serious allegations by the SEC. It had allegedly raised billions by duplicitously selling unregistered crypto asset securities and making false claims about its financial health. Another accusation was that of manipulating the price of its native token, CEL, since 2020.
In its endeavour to re-emerge, Celsius has been engrossed in creating a rebuilding plan from the start of the year, with four revisions already. The aim is to hasten repayments but legal obstacles continue to dog the firm. A glimmer of hope is the bankruptcy court’s permission to Celsius to present digital ballots for creditors to vote on the restructuring plan. However, a final verdict might be awaited till the next hearing due sometime in October.
Source: Cryptonews
