Unprecedented! Crypto.com Accused SEC of Overstepping its Statutory Authority
The lawsuit alleges that the SEC has overstepped its statutory authority by unilaterally expanding its jurisdiction over the cryptocurrency sector
In a significant escalation of the ongoing regulatory battle between the cryptocurrency industry and the US Securities and Exchange Commission (SEC), cryptocurrency exchange Crypto.com has filed a lawsuit against the agency. Notably, the lawsuit alleges that the SEC has overstepped its statutory authority by unilaterally expanding its jurisdiction over the cryptocurrency sector.
Additionally, this action follows the receipt of a Wells Notice, a precursor to potential enforcement action, from the SEC. Furthermore, it criticizes the SEC’s purported creation of an unlawful rule that designates nearly all crypto assets as securities, except for Bitcoin (BTC) and Ethereum (ETH).
Crypto.com’s move underscores the growing tension between the SEC and the cryptocurrency industry. The SEC has been actively pursuing regulatory enforcement actions against crypto firms, arguing that the industry lacks adequate investor protection and transparency.
Furthermore, the Commission’s stance has been characterized by a preference for regulation through enforcement, leaving many crypto companies in a precarious position.
Crypto.com Bold Lawsuit Confrontation
The Wells Notice issued to Crypto.com places it in a line of other firms facing similar scrutiny from the SEC. Notably, Crypto.com’s decision to sue the agency represents a bold step, with the company stating that it took this action “to protect the future of the crypto industry in the US.”
Nonetheless, the lawsuit further highlights the ongoing efforts by crypto companies to seek clarity and regulatory certainty within the US. Crypto.com’s simultaneous announcement that its subsidiary, Derivatives North America, is filing a petition with the Commodity Futures Trading Commission (CFTC) and the SEC regarding “crypto Derivatives Products Regulation” underscores this pursuit of a more defined regulatory landscape.
Moreover, Crypto.com’s lawsuit, though unprecedented for the company, reflects a growing sentiment within the crypto industry. The company’s statement emphasizes that “improper SEC enforcement actions are part of the process of operating a legitimate and licensed crypto business in the US,” suggesting a sense of frustration and a need for a more comprehensive regulatory framework.
