Crypto.com sues US SEC after legal threat from regulator
Crypto.com filed a lawsuit against the U.S. Securities and Exchange Commission on Tuesday, claiming the federal agency is exceeding its jurisdiction by regulating the cryptocurrency industry.
The crypto trading platform said its move follows the receipt of a ‘Wells notice’ from the top US market regulator, on the grounds that tokens traded on its platform qualify as securities.
A Wells notice is a formal statement that the regulator’s staff intends to recommend an enforcement action. The SEC declined to comment.
Crypto companies have long accused the SEC of overreach and of violating its jurisdiction, with the agency claiming the industry is ignoring securities laws designed to protect investors and other market participants.
“Our lawsuit alleges that the SEC has unilaterally expanded its jurisdiction beyond statutory limits and separately that the SEC has established an unlawful rule that trading in nearly all crypto-asset securities transactions,” Crypto.com said.
Retail trading platform Robinhood’s crypto business, major US crypto exchange Coinbase and NFT marketplace OpenSea are among the companies in the digital asset industry that have received similar notices from the SEC.
The Crypto.com case, filed in a federal court in Tyler, Texas, also names SEC Chairman Gary Gensler and four other commissioners as defendants.
In addition, the company has filed a petition with the Commodity Futures Trading Commission and the SEC, seeking a joint interpretation to confirm that certain cryptocurrency derivatives are exclusively regulated by the CFTC.
The CFTC did not immediately respond to a Reuters request for comment.
© Thomson Reuters 2024
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