Crypto.com has filed a lawsuit against the US SEC and a petition to receive joint interpretation from it and the CFTC.
In what is becoming a more frequently witnessed spectacle, another company, Crypto.com, sues the US Securities and Exchange Commission (SEC) for overstepping its bounds. The suit comes after the SEC sent the widely used crypto exchange a Wells Notice. The notice is issued by the regulator before it brings enforcement action, a warning of sorts.
Crypto.com, not wanting to lie down, announced on October 8 that it would take on the SEC with a suit of its own. “Today, Crypto.com has filed suit against the U.S. Securities and Exchange Commission (SEC),” the company’s article read. “We are doing so to protect the future of the crypto industry in the U.S., joining a series of our peers who are actively defending themselves and taking action against a misguided federal agency acting beyond its authorization under the law.”
The firm mentioned how unjust enforcement actions from the regulator have become the norm for operating a licensed crypto business in the country. It also highlighted how such a move was “unprecedented” for it, but the SEC leaves it no option due to its constant actions at the detriment of the industry’s development in the US.
Crypto.com’s lawsuit stated, “Rather than relying on statutory authority or undertaking notice-and-comment rulemaking, the SEC invented the term Crypto Asset Security out of whole cloth to expand its jurisdiction over the digital asset industry.” Other complaints shared the narrative of the company’s announcement post, letting the court know how the SEC operates by enforcement and not rule-making.
More Than Just the Lawsuit
The exchange has also taken other steps to hold the SEC and its commodities’ counterpart, the Commodity Futures Trading Commission (CFTC), accountable. It filed a petition to receive joint interpretation from both regulators about “certain cryptocurrency derivative products are solely regulated by the CFTC.” The agencies must reply to this request within 120 days to issue a joint interpretation. Otherwise, they can choose to deny it but must provide the reason for doing so within that period.
Regarding the steps taken by Crypto.com, its CEO, Kris Marszalek, said, “While we welcome recent bipartisan support for the industry, that message has not been received by current SEC leadership that issued us a Wells notice.”
