Crypto.com crypto exchange has announced that it is suing the U.S. Securities and Exchange Commission (SEC). This is in response to a Wells Notice issued by the SEC in August, which serves as a formal warning that the agency may pursue legal actions against the company.
CEO of Crypto.com announced on X that the firm filed a lawsuit against the SEC to “protect the future of crypto in the U.S.”
“We are doing so to protect the future of the crypto industry in the U.S., joining a series of our peers who are actively defending themselves and taking action against a misguided federal agency acting beyond its authorization under the law,” he said.
Crypto.com argues that the SEC has overstepped its authority and is hindering the growth of the crypto industry in the United States.
Crypto.com’s lawsuit points out that the SEC has not treated all cryptocurrencies equally. For instance, while Bitcoin and Ether have mostly escaped regulatory scrutiny, other similar tokens are facing possible enforcement actions.
The lawsuit contends that the SEC has “unilaterally expanded its jurisdiction beyond statutory limits.” According to the exchange, the SEC has established an “unlawful rule” that treats trades in nearly all crypto assets as securities transactions, while exempting Bitcoin and Ether without clear reasons.
However, Crypto.com isn’t the only one taking legal action at SEC. Earlier this year, crypto companies including Consensys and Binance also took the SEC to court after getting similar warnings.
Consensys, a blockchain tech company, filed its lawsuit in early 2024, citing that SEC was unfairly targeting their products without clear reasons. Binance, one of the largest cryptocurrency exchanges in the world, has also been in a long legal fight with the SEC, claiming that the agency has not clarified which digital assets it considers securities.
In addition to the lawsuit, Crypto.com is asking both the SEC and the Commodity Futures Trading Commission (CFTC) for clearer regulations. The company has submitted a petition to determine if specific cryptocurrency derivative products should be regulated solely by the CFTC.
However, Crypto.com assures its customers that its operations will continue as normal. The exchange is licensed in over 40 states and is registered with the Financial Crimes Enforcement Network (FinCEN).
