Crypto.com Lawsuit Accuses SEC of Overstepping Legal Boundaries
- Crypto.com sues the U.S. SEC over regulatory overreach.
- The lawsuit challenges the SECs classification of crypto assets as securities.
- Crypto.com seeks clarity from the CFTC and SEC regarding crypto derivative products.
Crypto.com has initiated a lawsuit against the U.S. SEC, challenging the agencys overreach in regulating crypto assets. The lawsuit follows the receipt of a Wells notice from the SEC, highlighting that the regulatory body had expanded its jurisdiction beyond legal boundaries. It argues that the SEC has issued an illegal rule where most crypto assets, other than Bitcoin and Ethereum, are categorized as securities.
In a statement, the exchange said the SECs enforcement actions are not about excess but to deliberately harm the future of the crypto industry in the U.S. The action represents a significant escalation in the ongoing battle between the SEC and several crypto companies that are engaging in legal combat, with the latter describing the formers actions as unjust regulatory actions.
Challenging the SECs Interpretation of Crypto Assets
One of the central arguments in the exchanges lawsuit is that the SEC has labeled virtually all crypto assets as securities without going through appropriate rule-making procedures. The ruling, according to Crypto.com, was never subjected to the necessary legal public notice or comment period and thus directly conflicted with the Administrative Procedure Act.
The company also argues that such differentiation by the SEC between crypto assets like BTC and ETH and the rest of the cryptocurrencies is arbitrary, because they are quite similar in characteristics.
With this legal avenue, the exchange wants to stop the actions of the SEC and create a more balanced approach toward regulations affecting crypto assets. It is not the only one involved in fighting this battle but several other firms too have taken the agency to court.
Crypto.com Seeking Clarity for Crypto Derivatives
Besides the lawsuit, Crypto.com also filed a petition with the CFTC and the SEC. The petition urged the two agencies to jointly interpret the regulation of cryptocurrency derivative products. Crypto.com hopes that such joined interpretation will give force to the Enabling Regulatory framework and provide much-needed clarity into the market.
Crypto.com said it remained confident that it was in compliance with U.S. law, pointing to an extended list of state licenses and federal registrations. It appeared to believe its attitude of working with regulators and security put it in a good position to fight this case against the SEC in court.
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Text source: TronWeekly
