Crypto.com has gone on the offensive against the US SEC over claims that some of its business dealings are investment contracts
Crypto Exchange Crypto.com has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC). The lawsuit challenges the agency’s regulatory reach over cryptocurrency transactions. This suit follows the receipt of a Wells Notice, a formal warning issued by the SEC, suggesting a likely enforcement action against the exchange.
Crypto.com Seeks Judicial Intervention
Crypto.com’s lawsuit claims that the SEC has embarked on a regulation-by-enforcement campaign instead of providing clear regulatory guidelines.
According to Crypto.com, this approach is unauthorized, as the agency has expanded its jurisdiction beyond what federal statutes allow. Meanwhile, the lawsuit underscores growing tensions between cryptocurrency platforms and regulatory authorities, accusing the SEC of overstepping its legal authority.
The lawsuit claims that the SEC has stated that almost all crypto transactions are considered securities, regardless of how they are carried out. As such, Crypto.com is seeking judicial intervention to halt the SEC’s actions. Likewise, the exchange contends that the agency has exceeded its legal authority and is violating federal law.
By taking this step, Crypto.com hopes to prevent the SEC from imposing its regular crackdown on the platform.
The Growing Fightback Against US SEC
Beyond Crypto.com, many in the crypto ecosystem are tired of the SEC’s incessant crackdowns. Earlier this year, ConsenSys also sued the markets regulator.
The company’s lawsuit hinges on the agency’s characterization of Ethereum (ETH) as a security rather than a commodity like Bitcoin. The firm also noted that the Commission “trained its sights” on the firm’s MetaMask software.
In the same month, an SEC staff member allegedly sent a Wells Notice to ConsenSys, suggesting an incoming enforcement action. However, just last month, a Texas federal judge decided to take sides with the SEC in its case against ConsenSys. Judge Reed O’Connor dismissed Consensys’ Ethereum case against the regulator.
Meanwhile, the blockchain company does not think it deserved Judge O’Connor’s verdict. Therefore, it has promised to keep fighting the SEC’s lawsuit over its MetaMask software.
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