Crypto.com Sues SEC, Citing Unlawful Expansion of Jurisdiction

Crypto.com Takes Legal Action Against SEC

Crypto.com files a lawsuit against the Securities and Exchange Commission

Crypto.com has taken the unprecedented step of suing the Securities and Exchange Commission (SEC), labeling the federal agency as “misguided” in its actions towards the cryptocurrency industry. The lawsuit comes after Crypto.com received a Wells notice from the SEC, signaling a potential enforcement action against the company.

Allegations of Unlawful Rulemaking by SEC

Challenging the SEC’s expansion of jurisdiction and classification of crypto assets

The lawsuit contends that the SEC has overstepped its statutory limits by unilaterally expanding its jurisdiction and establishing a rule that deems almost all crypto asset trades as securities transactions. Crypto.com argues that this classification is unfair, especially when compared to transactions involving bitcoin and ether.

SEC’s Refusal to Provide Information

Crypto.com faces challenges in obtaining transparency from the SEC

Despite the SEC’s issuance of a Wells notice in August, Crypto.com has faced obstacles in obtaining a comprehensive list of network tokens that the SEC considers to be crypto asset securities. The company has criticized the SEC’s lack of transparency and clarity in this matter.

Industry Pushback Against “Regulation by Enforcement”

Crypto firms and Coinbase challenge the SEC’s regulatory approach

The term “regulation by enforcement” has sparked backlash from U.S. crypto firms, including Coinbase, as they seek more clarity and specific regulations from the SEC. The industry argues that this approach hinders innovation and consumer protection.

Future Outlook for Crypto Regulation

Potential shifts in regulatory approach under the upcoming administration

Despite the current regulatory challenges, there are indications that the next administration could adopt a more favorable stance towards the crypto sector. This shift in approach could impact how cryptocurrencies are regulated in the future.