Digital currency trader blocked from filing for bankruptcy by SEC action
An Idaho-based digital currency trader has been barred from filing for Chapter 11 bankruptcy due to the terms of a court order obtained against him by the United States Securities and Exchange Commission (SEC).
Shawn Cutting of Crypto Traders Management LLC, and the company as a whole, were prevented from filing for bankruptcy due to the terms of the restraining order and an injunction that explicitly prohibited the filing of bankruptcy protection law.
The restraining order freezes the assets of Cutting and the company, following a lawsuit brought by the US regulator accusing Cutting of selling unregistered securities and embezzling investor funds.
Due to a lack of information on the financial situation of the defendants, the court accepted a settlement implementing an agreement that bankruptcy proceedings would be prohibited.
“The court does not have sufficient information on the financial situation of the defendants or on any intermediate change of circumstances which establishes that the defendants should be released from the [temporary restraining order] issued by the court or compromise whereby the defendants agreed to waive their right to file for bankruptcy.
The judge also dismissed Cutting’s request to quash two other claims against him, in an action initiated by two investors who said they had been “duped” into investing, for an amount of $ 730,000.
Cutting had applied for permission to sell two properties on its property in order to meet the demand, which was ultimately dismissed by the court in the meantime.
“The defendants have not alleged here that the writ was issued in an irregular or irregular manner, nor have they filed a written undertaking with the court to require the return of the lots. In addition, the defendants have not cited, and the court has not located, other grounds on which the court can amend the writ of seizure to release the lots for sale.
The case alleges Cutting raised some $ 7 million from investors claiming to have expertise in investing in digital assets that it did not actually own.
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