Crypto.com has filed a lawsuit against the United States Securities and Exchange Commission, alleging that it exceeded its authority in overseeing the digital assets industry. This lawsuit came after Crypto.com published a Wells notice a few weeks ago. Crypto.com has requested a jury trial to defend itself and cryptocurrencies in the United States.
The major problem facing the company is that the SEC has overstepped its authority. Crypto.com’s allegations show that the SEC is attempting to enforce regulations for which proper legal support is lacking. The exchange now joins others in the industry challenging the federal agency’s harmful approach.
Challenge the jurisdiction of the SEC?
One of the central points of Crypto.com’s lawsuit is its argument that the SEC unilaterally extended its jurisdiction beyond the law. A second important aspect of this lawsuit is that the SEC assessed most crypto asset transactions as being securities transactions. Crypto.com called this position inconsistent with the fact that assets such as Bitcoin and Ethereum are exempt.
He also claims the SEC violated the Administrative Procedure Act. Crypto.com argues that the SEC failed to provide the required notice and comment period to institute this rule. The company reiterates that the SEC acts arbitrarily and capriciously and that its actions lack sufficient legal basis.
Crypto.com Affiliate Requests Clarification From CFTC and SEC
As part of the lawsuit, Crypto.com affiliate Crypto.com | Derivatives North America LLC-aka CDNA has filed a petition with the Commodity Futures Trading Commission. CDNA also filed another request with the SEC to join in interpreting how certain crypto derivatives fall under the auspices of both.
Crypto.com maintains that it is committed to compliance. The company is registered as an MSB with FinCEN and has more than 40 government money transmitter licenses. In this case, CDNA is also registered as DCM and DCO with the CFTC.
Will this be a test case of crypto regulation?
The Crypto.com trial takes place in a context of decidedly increased tensions between The SEC and the Crypto Industry. The case would therefore allow us to draw a line in the sand. This is how he could put an end to this affair once and for all and provide a most conducive environment.
Crypto.com believes that recent court rulings against the SEC have strengthened its position. The exchange is also confident that its claims will be vindicated in the United States in court. Meanwhile, the Singapore-based exchange is trying to reassure its customers that the legal battle will not disrupt operations.
Crypto.com remains committed to its vision of ‘cryptocurrency in every wallet.’ By taking this action against the SEC’s illegal actions, the exchange is building a safer and more compliant future for cryptocurrency.
The case represents the latest salvo in an ongoing debate over how cryptocurrencies should be regulated in the United States. We hope that Crypto.com’s challenge to the SEC’s approach will protect it from excessive perception that could have harmed the industry.
