The U.S. Securities and Exchange Commission (SEC) has said it “reserves its rights” to object to proposals by FTX administrators to pay creditors in stablecoins .

In a court filing released on Friday, the regulator said that it “is not opining as to the legality, under the federal securities laws, of the transactions outlined in the Plan and reserves its rights to challenge transactions involving crypto assets.”

The SEC also noted that the administrators for the FTX estate “have not identified the distribution agent, which may potentially distribute stablecoins to creditors under the Plan.”

The news comes after the bankrupt crypto exchange, which crashed spectacularly in November 2022, agreed on a plan to pay back its creditors between $14.5 billion to $16.3 billion in total compensation in May 2024.

The approved restructuring plan would have given debtors up to 118% of their claims in cash, though only those claiming less than $50,000 would have been eligible for the repayments.

The SEC and stablecoins

The SEC’s latest statement may contradict some of the regulator's earlier statements about the status of stablecoins.

In August, another SEC filing said that “Cash” could include “U.S. Dollar pegged Stablecoin” alongside traditional financial instruments like bank deposits and checks.

If approved, this wouldn’t be the first time we’ve seen a bankrupt crypto firm pay former users in cryptocurrency rather than cash. Failed lender BlockFi did this in July 2024, returning tokens to customers via Coinbase .

Whether stablecoins can be counted merely as cash, or “crypto assets”, has long been a point of contention between the SEC and many of the crypto world’s largest firms.

One of the world’s largest stablecoin providers, Paxos, won a court case in July of this year in which the SEC attempted to classify its Binance-branded stablecoin BUSD as a “crypto asset”.

SEC chair Gary Gensler has criticized stablecoins in the past, saying in August 2021 that they “may help facilitate those seeking to sidestep a host of public policy goals.”

The SEC’s most recent statement has attracted criticism from some in the cryptocurrency world about their continued attitude toward stablecoins.

In a tweet , Alex Thorn, head of research at Galaxy Research, called the statement “the height of jurisdictional overreach.”

He argued that the SEC “doesn’t even make a case here,” and that its efforts are “a bludgeon they must keep sharp, lest any legitimate actors deign to wield these (boringly above-board) instruments.”

The size of FTX’s legal fees may indicate the ongoing complexity of the case, with professional fees passing the $800 million threshold, per one estimate .