Crypto.com has taken legal action against the U.S. Securities and Exchange Commission (SEC), joining other cryptocurrency companies in challenging the agency’s regulatory approach to digital assets.
The lawsuit comes after Crypto.com received a Wells notice from the SEC, indicating that the company might face enforcement action.
While a Wells notice suggests potential regulatory scrutiny, it doesn’t imply any proven wrongdoing by Crypto.com. The exchange argues that the SEC has overstepped its authority by classifying most crypto assets as securities, excluding Bitcoin and Ether.
Crypto.com claims this decision was made without a proper legal framework and lacks a consistent basis, given that many other crypto transactions are similar to those involving BTC and ETH.
This move by Crypto.com follows similar notices issued to other prominent companies in the crypto space, including OpenSea, Coinbase, Kraken, and Robinhood, as the SEC intensifies its focus on regulating digital assets.
“Our decision to sue the SEC follows our receipt of a Wells notice from the Commission staff, illustrating that the SEC’s unauthorized and unjust regulation by enforcement campaign continues despite bipartisan indications that the next Administration will take a more constructive and effective approach to advancing crypto in the U.S.,” Crypto.com said in a statement.
In a parallel move, Crypto.com has also petitioned both the Commodity Futures Trading Commission (CFTC) and the SEC to clarify the regulatory jurisdiction over cryptocurrency derivatives. The company asserts that these products should fall under the CFTC’s oversight, seeking a clearer framework for how crypto assets are regulated in the U.S.
Crypto.com highlighted its registrations with the Financial Crimes Enforcement Network (FinCEN) and over 40 state money transmitter licenses. The exchange is also a designated contract market and clearing organization under the CFTC’s guidelines.
Despite the regulatory challenges, Crypto.com reported a decent rise in its trading volume, with a 40% increase in both spot and derivatives trading in September. The exchange now holds a 10.5% market share in spot trading, marking substantial growth this year, according to data from CCData.
