Key takeaways
- Cryptocurrency exchange Crypto.com has sued the SEC, indicating that it believes the agency has overstepped its legal bounds in regulating the crypto industry.
- The lawsuit was filed Tuesday after the SEC sent Crypto.com a Wells Notice, which informs the recipient that the SEC is considering formal legal action against them.
- Crypto.com’s lawsuit claims the SEC has been inconsistent in its application of securities law to crypto, saying other crypto assets deserve the leeway afforded to bitcoin and Ethereum’s token.
- Blockchain technology company Consensys also preemptively sued the SEC after receiving a Wells notice earlier in the year.
Cryptocurrency exchange Crypto.com sued the United States Securities and Exchange Commission (SEC) on Tuesday, citing concerns that the SEC’s actions exceeded legal limits and jeopardized the future of the crypto industry in the United States. UNITED STATES.
According to Crypto.com, the lawsuit follows a Wells Notice issued in August by the SEC to the company, which is a letter indicating the SEC’s intent to take legal action against the crypto startup.
The bulk of Crypto.com’s lawsuit contends that the SEC has unilaterally expanded its jurisdiction beyond the limits established by law, including by classifying most crypto transactions as securities transactions.
Crypto.com Lawsuit Accuses SEC of Inconsistency
The company says this regulatory position is applied inconsistently, exempting bitcoin (BTCUSD) and ether (ETHUSD) despite their perceived similarity to other crypto assets. Crypto.com also pointed out in the suit that the SEC circumvented key procedural steps, including regulatory notice and comment requirements under the Administrative Procedure Act.
In filing this action, Crypto.com said it aims to stop what it considers to be the SEC’s “unlawful” campaign against the crypto industry.
Additionally, Crypto.com has filed a petition with the Commodity Futures Trading Commission (CFTC) and the SEC to establish a clearer regulatory framework for cryptocurrency derivatives in the United States.
Blockchain technology company Consensys also filed a preemptive action against the SEC earlier this year after receiving a Wells notice.
