- Crypto.com sued the SEC for exceeding its regulatory authority over cryptocurrencies.
- The lawsuit challenges SEC rules that classify most crypto transactions as securities.
- Crypto.com is also seeking clarity on crypto derivatives through a petition to the CFTC.
Crypto.com filed a lawsuit today against the U.S. Securities and Exchange Commission (SEC) in response to a Wells notice it received from the agency.
According to the exchange’s announcement, the complaint aims to challenge what Crypto.com describes as the SEC’s overreach and misguided regulatory actions that threaten the future of the cryptocurrency industry in the United States.
The complaint states that the SEC improperly expanded its jurisdiction by asserting that nearly all cryptocurrency transactions qualify as securities, with the exception of those involving Bitcoin (BTC) and Ethereum (ETH).
Crypto.com argues that the SEC adopted this approach without the notice-and-comment period required by the Administrative Procedure Act, rendering the rulemaking unlawful.
The company says this selective enforcement is inconsistent with sound regulatory practice, especially given that the characteristics and methods of offering many crypto assets are often indistinguishable from those of BTC and ETH.
Crypto.com emphasizes that it has consistently prioritized compliance and security, operating as a registered money services business with the Financial Crimes Enforcement Network (FinCEN) and holding more than 40 state money-transmission licenses.
The firm says the lawsuit is a necessary step to halt SEC actions that it contends exceed the agency’s legal authority and violate federal law.
In addition to the lawsuit, a Crypto.com subsidiary, Crypto.com Derivatives North America, filed a petition with the Commodity Futures Trading Commission (CFTC) and the SEC.
The petition requests a joint interpretive ruling confirming that certain crypto derivative products fall exclusively under the CFTC’s jurisdiction, underscoring Crypto.com’s effort to clarify the regulatory framework for the industry.
While confronting this unprecedented legal challenge, Crypto.com remains steadfast in its commitment to compliance, arguing that its regulatory efforts will ultimately benefit customers and the broader crypto ecosystem.
This lawsuit highlights the growing tensions between cryptocurrency firms and federal regulators and underscores the urgent need for clearer rules in the rapidly evolving digital economy.