The US Securities and Exchange Commission (SEC) has outlined its position on the alleged participation of Coinbase Global in the Celsius Network plan to exit bankruptcy.

In this case, the special attitude of the regulator to the mentioned process is natural. The SEC has accused Coinbase of operating as an unregistered securities exchange, broker, and clearing house. The regulator expressed concern about the agreements between Celsius and Coinbase. The commission’s position is based on the opinion that the transaction goes beyond the services of a distribution agent.

The media reports that the attention from the regulator complicates the efforts of Celsius, which are aimed at restructuring and distributing bitcoin and ether among its customers in the amount of about $2 billion. This company is a crypto lender. The firm filed for bankruptcy protection in July 2022. Currently, Celsius is striving to start operating as a company that is owned by users.

The firm plans to transfer its assets under the management of the investment company Arrington Capital, which is part of the consortium that won the assets of Celsius at the bankruptcy auction. This auction was held in the current year.

The SEC, along with the Department of Justice bankruptcy oversight authority and some Celsius clients, objects to certain provisions of the company’s Chapter 11 bankruptcy exit plan. The commission’s concerns are related to Coinbase’s role in distributing the firm’s assets to international clients. The SEC states that the agreements between Celsius and the crypto exchange go beyond the services of a distribution agent, including brokerage services and master trading.

Paul Grewal, general counsel of Coinbase, last Monday, September 25, in his account registered on the social network X, said that the company is proud to cooperate with a crypto lender to distribute digital currency among its customers. He also stated that he did not understand why the SEC objected to the deal in this case. Separately, Paul Grewal reported on the expectation of considering the issue in the bankruptcy court and fulfilling the important role of Coinbase to make Celsius customers whole.

The SEC objects not only to the proposed bankruptcy procedure of the crypto lender but also brought charges of involvement in fraudulent activities against this company and its former CEO Alex Mashinsky. The ex-head of the firm also faced criminal charges. Alex Mashinsky denies any involvement in these actions. In the indictment, prosecutors said that he and the co-defendant in the case, Roin Cohen-Pavone, the company’s revenue director, ran the firm as a risky investment fund, receiving money under far-fetched pretexts.

The Ministry of Justice also accused Celsius executives and other employees of involvement in illegally manipulating the price of CEL’s digital currency, forcing people to buy it at an inflated cost.

In the first half of September, it was reported that the former executive director of the Celsius Network, Roni Cohen-Pavon, admitted the fact of his guilt on criminal charges in the United States. He also agreed to cooperate with the prosecutor’s investigation.

As we have reported earlier, Ripple Plans to Block SEC from Appealing Recent Crypto Court Ruling.