Crypto.com Files Suit Against SEC After Receiving a Wells Notice From the Regulator
Prominent exchange Crypto.com sued the US Securities and Exchange Commission (SEC) on Thursday after receiving a Wells notice, which indicated that the American regulator planned to take legal action against the company. In an X post, the trading platform said the SEC accused it of violating securities policies.
What is Crypto.com?
Crypto.com is a well-known exchange that enables users to trade cryptocurrencies and offers debit cards, which allow customers to use their digital assets to pay for shopping at select merchants.
The crypto trading platform is also known for sealing high-end sponsorship deals with various sports organizations like Formula 1, Los Angeles Lakers, and Ultimate Fighting Championship.
While announcing its lawsuit against the SEC, Crypto.com called out the regulator for embracing an “unjust and unauthorized regulation by enforcement approach despite clear signs that the next administration will adopt an effective and constructive approach to promote crypto innovations in the United States.”
Crypto.com’s Lawsuit Against SEC
In the suit, Crypto.com accused the SEC of illegally inventing the term “Crypto Asset Security” to extend its control to the digital asset industry. The company argues that the term isn’t found in the Exchange Act or Securities Act and doesn’t resemble any legally recognized financial instrument.
Over the past two years, the SEC, under the leadership of Gary Gensler, has taken legal action against several crypto firms, including Ripple, Uniswap, and Coinbase. One of the primary reasons the US watchdog has gone after these companies is because it accuses them of selling unlicensed securities in the form of digital assets.
SEC’s Accuses Crypto.com of Selling Unregistered Securities
In its latest Wells notice, the SEC has alleged that Crypto.com supports the sale of several crypto tokens, which the regulator deems unregistered securities. The tokens mentioned in the notice include Binance Coin, Cardano, Solana, Algorand, Dash, Near, Internet Computer, Filecoin, Flow, and Cosmos.
Meanwhile, Crypto.com has asked the court in its lawsuit to order the SEC and the Commodity Futures Trading Commission (CFTC) to jointly confirm that some cryptocurrencies are overseen by the CFTC, which recently said that Ethereum and Bitcoin are commodities. The exchange argues that the tokens mentioned in the Wells notice operate like the two largest cryptocurrencies, so they are not securities.
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