Crypto.com, a prominent cryptocurrency exchange, has initiated a lawsuit against the U.S. Securities and Exchange Commission (SEC) following a Wells notice, asserting that the agency has overstepped its jurisdiction by classifying nearly all cryptocurrency transactions as securities. The exchange claims this classification lacks legal foundation and violates the Administrative Procedure Act by bypassing necessary public comment periods.
🚨NEW: @cryptocom now doing what @Consensys did earlier this year — preemptively suing the @SECGov in response to a Wells notice it received.
The exchange says it’s suing the SEC because it has “unilaterally expanded its jurisdiction beyond statutory limits” and “established an…
— Eleanor Terrett (@EleanorTerrett) October 8, 2024
Crypto.com’s legal action reflects a growing trend among cryptocurrency firms pushing back against what they perceive as regulatory overreach by the SEC. The lawsuit argues that the SEC has expanded its authority and established unlawful rule regarding crypto assets, specifically stating that trades in most digital currencies are securities, while similar transactions involving Bitcoin and Ethereum are not.
This move comes amid heightened scrutiny of the crypto industry, with major players like Ripple, Coinbase, Paxos and Binance are also facing SEC lawsuits. The SEC’s aggressive stance has raised concerns about its impact on innovation within the industry.
Crypto.com files Petitions as well
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Concurrently, Crypto.com has also filed a petition with both the SEC and CFTC to clarify the regulatory status of certain cryptocurrency derivatives, emphasizing its commitment to compliance. The firm maintains that it operates within legal framework, holding various licenses and registration to support its business model.
As a the legal landscape evolves, industry stakeholders are closely watching these developments. The outcomes of these lawsuits could set significant precendents for how cryptocurrencies are regulated in the future. Crypto.com remains optimistic that judicial intervention will validate its claims and provide much-needed clarity for the industry, ensuring continued operations while advocating for fair regulations.
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