The platform believes that the SEC has expanded its jurisdiction beyond legal limits.
“We seek to stop the SEC’s illegal actions that exceed its authority and violate the law,” they say.
This Tuesday, October 8, Crypto.com filed a lawsuit against the United States Securities and Exchange Commission (SEC), seeking to protect the future of the cryptocurrency industry in the country. The platform thus joins “a number of colleagues” who are actively defending themselves and taking action against a “misguided federal agency that acts beyond its authorization under the law.”
Crypto.com exchange’s decision to take legal action respond to a Wells notice received from SEC staff, illustrating the continuation of an “unauthorized and unfair regulatory campaign.”
“Our decision to sue the SEC comes after receiving a notification from Wells from the Commission staff,” they explained from Crypto.com. They added that “improper SEC enforcement actions are part of the process of operating a legitimate, licensed cryptocurrency business in the US.”
Crypto.com argues that the SEC has unilaterally expanded its jurisdiction beyond legal limits. “Specifically, our lawsuit alleges that the SEC has established an illegal rule that transactions in nearly all cryptoassets are securities transactions, while identical transactions in bitcoin (BTC) and ether (ETH) somehow are not.” ”, details the company.
This rule, never subject to a notice and comment period under the Administrative Procedure Act, It is arbitrary and capriciousespecially considering that these cryptoassets have characteristics practically indistinguishable from BTC and ETH, says the platform.
Petition to the CFTC and SEC
In addition to the lawsuit, Crypto.com filed a petition with the Commodity Futures Trading Commission (CFTC) and the SEC seeking a joint interpretation confirming that certain cryptocurrency derivative products are regulated solely by the CFTC.
This petition seeks regulatory certainty under the Dodd-Frank Act, allowing market participants to request clarity on the classification of their financial products.
Crypto.com is committed to use all available regulatory tools to provide clarity to the industry, they say in a statement. The joint rules allow participants ask whether a product is a “swap”, a “value-based swap” or a “mixed swap”, with a period of 120 days for a joint interpretation or denial with public explanation.
The exchange, which is classified as the 13th largest by trading volume, but one of the most regulated, “trusts that the US Judiciary will help provide much-needed control over the arbitrary actions of the current SEC leadership against cryptocurrencies and validate our claims.”
Crypto.com’s legal action joins that of Coinbase, which in June 2024 also sued the SEC for similar reasons in a court in Washington DC, as reported by CriptoNoticias. Likewise, the blockchain analysis firm Messari sued the SEC, calling it “illegitimate and corrupt,” as reported by this outlet.
This article was created using artificial intelligence and edited by a human Editor.
