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The United States Securities and Exchange Commission has filed an objection to Celsius Network’s reorganization plan based in part on the regulator’s own ongoing lawsuit with crypto exchange Coinbase.

On Sept. 22, the SEC filed a limited objection and reservation of rights with the U.S. Bankruptcy Court for the Southern District of New York over Celsius’ most recently proposed restructuring plan. The fourth revision of the bankruptcy plan, filed on Aug. 15, followed an initial proposal in March but has not been approved.

A supplement to the reorganization plan proposed a distribution services agreement with Coinbase, which Celsius sought to file under seal. The SEC claimed in its objection that the deal may require Coinbase to “go far beyond the services of a distribution agent,” potentially providing services at issue in the commission’s civil suit filed in June.

“The Debtors have confirmed that they do not intend for Coinbase to provide brokerage services to the Debtors, despite the language in the Coinbase Agreements to the contrary,” says the filing. “However, this Court should not be asked to approve a deal where the material terms are missing or inconsistent.”

Revisions to the Celsius restructuring plan have been ongoing since March, while Coinbase faces an SEC lawsuit over allegedly offering unregistered securities. In a Sept. 25 post on X (formerly Twitter), Coinbase CEO Brian Armstrong and chief legal officer Paul Grewal said the exchange was “proud to engage with Celsius” in its efforts to return user funds:

Related: Celsius chooses NovaWulf’s bid to exit from bankruptcy

The bankruptcy court filing followed Celsius announcing a deal with Core Scientific in which the mining firm agreed to sell a mining data center to Celsius in exchange for $14 million in cash and settling all existing legislation between the two firms. According to Core Scientific, Celsius had defaulted on its payments since filing for bankruptcy in July 2022.

In August, the bankruptcy court approved Celsius sending out digital ballots to vote on the restructuring plan in October. The next hearing in the bankruptcy case is scheduled for Oct. 5.

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