SEC opposes Voyager Digital’s plan to repay bankrupt creditors with cryptocurrency

03/04/2023 00:51 • Metaverse Matters • 90 views

It is reported that a lawyer from the Securities and Exchange Commission of the United States said in court on Friday that the new cryptocurrency that Voyager Digital plans to issue to pay the bankrupt creditors is actually a securities that should be regulated. William Uptegrove’s comments on behalf of the United States Securities and Exchange Commission reflect the views of SEC staff, which may complicate the proposal of bankrupt cryptocurrency companies to repay creditors by issuing digital tokens. Part of the plan also includes the sale of Binance.US. Uptegrove opposed the proposal and responded to the challenge raised by the judge supervising the Voyager bankruptcy case against the views of the SEC staff. The lawyer said that the committee itself had not made a clear position.

SEC lawyer: Voyager’s bankruptcy token should be regulated

Analysis based on this information:

The Securities and Exchange Commission (SEC) of the United States has reported that the newly planned cryptocurrency to be issued by Voyager Digital, aiming to pay back the bankrupt creditors, is classified as a security that should be regulated. William Uptegrove, representing the SEC, has cautioned against the use of digital tokens to repay creditors, causing complications for bankrupt cryptocurrency companies. Voyager Digital’s proposal also includes the sale of Binance.US, which has been opposed by Uptegrove. Despite the challenge raised by the judge supervising the Voyager bankruptcy case, the SEC staff has refused to support the proposed plan. Uptegrove has noted that the committee is yet to establish its position.

The SEC’s opposition to Voyager Digital’s proposal raises questions about the regulatory compliance of the proposed cryptocurrency tokens. The SEC has consistently viewed that most digital assets fall into the category of securities, and they must be registered under the US securities laws before they can be issued or traded. The classification of cryptocurrency as securities implies additional compliance requirements for cryptocurrency firms, such as registration with the SEC, which can increase operational costs.

The SEC’s unsupportive stance may impede the plans of other cryptocurrency companies attempting to pay back their creditors. However, SEC’s opposing view has also created dissenting opinions among market participants on cryptocurrency regulation. The disagreement over the regulatory status of cryptocurrency in the market has been a perpetual issue due to its decentralized and borderless nature.

In conclusion, the SEC’s opposition to Voyager Digital’s proposal signifies its concern regarding the legitimacy of cryptocurrency as a security. Cryptocurrency firms seeking to repay their creditors with digital tokens may have to comply with securities regulations. The case highlights the need for clarification on the regulatory status of cryptocurrencies, which will provide clarity for market participants to operate in compliance with securities laws.

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SEC opposes Voyager Digital’s plan to repay bankrupt creditors with cryptocurrency

SEC lawyer: Voyager’s bankruptcy token should be regulated

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