The cryptocurrency exchange Crypto.com has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), accusing the regulator of overstepping its legal authority in regulating the crypto industry.
The decision to sue the SEC came after Crypto.com received a Wells Notice from the agency, as stated on the company’s website on Tuesday. The exchange claims the lawsuit is aimed at safeguarding the future of the cryptocurrency industry.
A Wells Notice is a formal alert indicating that the regulator plans to recommend enforcement action. Other companies in the digital asset space, including Robinhood’s crypto division, Coinbase, and the NFT platform OpenSea, have also received similar notices, according to Reuters.
Crypto.com, based in Singapore, described the SEC’s actions towards the crypto sector as “unauthorized and unjust,” saying that legal action became the only recourse.
“Our lawsuit argues that the SEC has unilaterally extended its jurisdiction beyond statutory limits. Additionally, the SEC has wrongly classified trades in nearly all crypto assets as securities transactions, regardless of how they are conducted,” the statement reads.
Crypto.com is seeking to halt what it calls the SEC’s “illegal overreach” and violations of federal law.
In a separate move, the company has filed a petition with both the SEC and the Commodity Futures Trading Commission (CFTC), asking for a joint interpretation to confirm that certain cryptocurrency derivatives fall under the exclusive regulation of the CFTC.
The lawsuit is the latest in a series of clashes between the crypto industry and U.S. regulators, which escalated after the collapse of FTX in 2022. The Bahamas-based exchange was revealed to be a Ponzi scheme, with executives misappropriating investor funds and channeling them into political donations.
Source: RT.COM
