Crypto.com has taken legal action against the U.S. Securities and Exchange Commission (SEC), claiming the agency is unlawfully extending its regulatory reach into the cryptocurrency sector. The lawsuit, filed on Tuesday, follows a “Wells notice” from the SEC, which warns that the commission’s staff may recommend enforcement action against the platform, asserting that certain tokens it offers are classified as securities.
A Wells notice signals that the SEC suspects violations of securities laws, but Crypto.com argues that the SEC is exceeding its statutory authority. “Our lawsuit contends that the SEC has unilaterally expanded its jurisdiction beyond statutory limits, and that it has effectively established an unlawful rule designating nearly all crypto transactions as securities trades,” the platform stated.
This lawsuit adds Crypto.com to a growing list of crypto firms clashing with the SEC, which has recently issued similar notices to major players such as Robinhood, Coinbase, and OpenSea. While crypto companies argue that the SEC is intruding beyond its boundaries, the agency maintains it is upholding investor protections through its actions.
Crypto.com’s case, filed in Tyler, Texas, names SEC Chair Gary Gensler and four other commissioners as defendants. The platform also submitted a petition to both the SEC and the Commodity Futures Trading Commission (CFTC), seeking a clear determination that specific crypto derivatives should be exclusively regulated by the CFTC. The SEC declined to comment on the lawsuit.
This latest move underscores the ongoing tension between the SEC and the cryptocurrency industry, as both parties seek clarity on the boundaries of regulatory oversight.
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