The U.S. Securities and Exchange Commission (SEC) may oppose the plan proposed by bankrupt cryptocurrency exchange FTX to repay creditors using U.S. dollar-pegged stablecoins.
The SEC pointed out that the administrators for the FTX estate have not identified the distribution agent, which may potentially distribute stablecoins to creditors under the plan.
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The approved restructuring plan would have allowed debtors to receive up to 118% of their claims in cash, but only those claiming less than $50,000 would have been eligible for the repayments.
Why It Matters: The development came after the cryptocurrency exchange, which went bust in November 2022, agreed on a plan to repay its creditors between $14.5 billion and $16.3 billion in total compensation, about $5.3 billion more than what was owed.
This was a rare outcome in U.S. bankruptcies where creditors typically receive only a fraction of their claims. The majority of customers are expected to receive 118% of their claims in cash.
Price Action: As of this writing, FTX Token (CRYPTO: FTT) tied to the exchange was trading at $1.29, up 5% in the last 24 hours, according to data from Benzinga Pro.
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