With its crypto crackdown policy, the SEC does not shy away from interfering in the legal affairs of crypto companies. New industry players have unsuccessfully criticized this behavior by the United States Securities and Exchange Commission. Now, a judge in the Southern District of New York is making a ruling that could put the regulator on the back burner.
A judge criticizes the SEC and accuses it of interference
Earlier this year, the SEC opposed Binance’s US arm’s acquisition of Voyager Digital. Still, the transaction was meant to allow the crypto lender to repay customers who lost their funds in its downfall. At the time, Judge Michael Wiles had asked the SEC to clarify the reasons for its opposition. He observed that the SEC kept “stop everyone in their trackswithout explaining his concerns. Now, he is announcing his decision to block the regulator from further interfering in crypto court cases.
The Southern District of New York judge said the SEC’s position is harmful. He added that it leaves “a sword suspended above the head of all who are going to perform this procedure“. According to him, the US regulator does not have the authority to meddle in the bankruptcy proceedings of crypto companies. The judge no longer intends to allow the SEC to assert during bankruptcy proceedings that a crypto is a security.
What is he going to do ?
The judge also made the decision to prevent the regulator from punishing certain executives and advisers. These are the specialists who lead the discussions for the creation of a new token that can facilitate the reimbursement procedure. The SEC had expressed its intention to punish these specialists for working on the proposals for the creation of the new token.
According to the judge, it is out of the question to punish these people for such a reason. Speaking to the SEC, Judge Michael Wiles said:How can a bankruptcy proceeding or any other legal proceeding work with this kind of suggestion?“. However, it allows the regulator to prosecute attempts by Binance.US or Voyager to issue a bankruptcy token in the future.
In December, it was announced that Binance.US would offer itself the assets of Voyager Digital for $1.022 billion. It should be noted that FTX had offered, before its fall, to acquire the assets of the crypto lender.
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