Cryptocurrency exchange Crypto.com is suing the U.S. Securities and Exchange Commission (SEC). This comes after the company received a Wells Notice from the SEC. It is a kind of a warning that the SEC is likely to take enforcement action regarding the securities laws.
The lawsuit, names the US SEC Chair Gary Gensler and 4 commissioners. It challenges the regulator’s classification of certain crypto assets as securities.
According to Crypto.com, the SEC has gone beyond its jurisdiction in the classification of cryptocurrencies as securities without adequate legal framework.
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The suit is meant to stop what Crypto.com has claimed as the SEC’s unlawful actions. It further seeks an injunction to stop the SEC from extending its reach in this manner.
In the lawsuit, Crypto.com accuses the SEC of exceeding its jurisdiction by categorizing most cryptocurrencies as securities and excluding only Bitcoin and Ethereum. The company has argued that the agency’s action is arbitrary and not supported by any reasonable legal grounds.
According to the crypto exchange, these rules were enacted without engaging the public violating the legal requirements of the Administrative Procedure Act.
The complaint, filed in Texas, seeks an injunction on the SEC’s actions, saying the actions are ‘arbitrary and capricious.’ According to the suit, Crypto.com is pursuing legal action to protect not only its rights but also the rights of the entire US cryptocurrency market.
Exchange CEO Gives Updates
The co-founder and CEO of the exchange, Kris Marszalek posted on X about the lawsuit filed by the US SEC sharing more insights into the occurence.
Via their official blog, the firm stated that,
“Our lawsuit contends that the SEC has unilaterally expanded its jurisdiction beyond statutory limits and separately that the SEC has established an unlawful rule that trades in nearly all crypto assets are securities transactions no matter how they are sold, whereas identical transactions in bitcoin (BTC) and ether (ETH) are somehow not.”
He further added that Crypto.com seeks to end the SEC’s illegal actions in excess of their authority as well as the violation of federal law in their tracks.
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