Crypto.com has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) after receiving a Wells notice, which indicates impending legal action from the agency. The exchange said that it was left with no other option as the SEC continues its aggressive “regulation by enforcement” approach.
Crypto.com Challenges “Crypto Asset Security” Classification
Crypto.com contends that the SEC’s creation of the term “crypto asset security” is without basis in U.S. law, arguing it was made up solely to expand the agency’s control over digital assets. Crypto.com’s filing insists the SEC’s approach is harmful to the industry and adds uncertainty to a space that is eager for regulatory clarity.
Push for Dual Oversight with CFTC
To add clarity, Crypto.com has also filed a joint petition with the CFTC, seeking a formal ruling that some assets should be classified as commodities, not securities. This request aligns with the CFTC’s stance on Bitcoin and Ethereum as commodities. Crypto.com hopes a court decision will provide a clearer regulatory framework, benefiting the entire industry.
SEC’s Continued Crackdown on Crypto
Under Chair Gary Gensler, the SEC has targeted numerous crypto firms, including Coinbase, Ripple, and Uniswap, over alleged securities law violations. Crypto.com’s lawsuit represents a significant challenge to the agency’s current stance and could lead to more structured regulation, something the crypto industry has long demanded.
Source: Decrypt
