A Southern District of New York judge said he would prevent the SEC from intervening in a bankruptcy proceeding because a new crypto asset is a security.
Bloomberg reports that Judge Michael Wiles would not let the U.S. Securities and Exchange Commission penalize executives and consultants working on ideas to develop a new token to assist in the repayment of consumers.
The SEC lodged an objection to bankruptcy proceedings for troubled crypto lender Voyager at the beginning of this year, which would aid in the repayment of impacted clients.
First, Judge Michael Wiles said that he requires facts about the SEC’s objections and its decision to “halt everyone in their tracks” with minimal explanation of its concerns.
But, in a recent order, Judge Wiles argues that the SEC’s position will do nothing but harm, leaving “a sword hanging over the heads of everybody who intends to complete this deal.”
The judge criticized the SEC’s meddling, saying, “How can a bankruptcy procedure or any other judicial proceeding work with such a suggestion?”
US purchased almost $1 billion worth of assets from Voyager, a transaction made after FTX’s intentions to buy the assets fell through.
According to Judge Wiles, the SEC may pursue Binance.US or Voyager’s efforts to produce an actual bankruptcy token.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.