Crypto.com Has Filed Suit Against the SEC Over Unjust Regulatory Actions in Crypto Space
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- Crypto.com has filed a lawsuit against the SEC, challenging its regulatory actions and claiming the agency is overstepping its authority in the crypto industry.
- The lawsuit follows a Wells notice and questions the SEC’s classification of most crypto assets as securities, calling the rule arbitrary and unlawful.
Crypto.com has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), challenging what it describes as unauthorized and unjust regulatory actions. The move positions the cryptocurrency platform alongside several other industry peers taking legal action against the federal agency, which they claim is overstepping its legal boundaries.
The lawsuit follows the receipt of a Wells notice from the SEC, signaling potential enforcement actions against Crypto.com. The company argues that the SEC’s enforcement campaign is not only unauthorized but also counterproductive, particularly given bipartisan indications that the next U.S. administration may adopt a more favorable stance toward the cryptocurrency sector.
In its legal filing, Crypto.com contends that the SEC has expanded its jurisdiction beyond statutory limits. The company specifically challenges a rule established by the SEC that classifies nearly all crypto asset transactions as securities, except for trades involving Bitcoin (BTC) and Ether (ETH). Crypto.com argues that this rule was enacted without the required public notice and comment period under the Administrative Procedure Act and describes the agency’s enforcement as arbitrary and capricious.
Crypto.com is seeking to halt the SEC’s actions, asserting that the agency’s approach to regulating the crypto industry exceeds its legal authority and violates federal law.
“We are confident that our internationally recognized commitment to regulatory compliance and the recent court rulings against the SEC’s claims towards crypto industry participants put us in a winning position to challenge their unjust actions,” Crypto.com noted in its official blog post.
“Although unfortunate, we trust the U.S. Judicial Branch will help provide the much-needed check on the current SEC leadership’s arbitrary actions against crypto and validate our claims. Our success in this matter will reaffirm our compliant operation for the benefit of our customers and the entire category in the U.S.,” it added
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Crypto.com’s subsidiary, Crypto.com | Derivatives North America (CDNA), has filed a petition with both the U.S. Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) seeking clarification on the regulatory oversight of certain cryptocurrency derivative products. The petition aims to confirm that specific derivatives fall under the sole jurisdiction of the CFTC, in line with joint rulemaking provisions under the Dodd-Frank Act.
The petition triggers a 120-day window for the CFTC and SEC to issue a jointly approved interpretation or deny the request, with required public reasoning in case of denial. Crypto.com emphasizes its commitment to using available regulatory tools to provide certainty to the crypto industry.
In the U.S., Crypto.com holds over 40 state money transmitter licenses and is registered as a money services business with FinCEN. Its CDNA affiliate is also recognized as a designated contract market (DCM) and derivatives clearing organization (DCO) by the CFTC. Globally, Crypto.com boasts more than 100 regulatory approvals, underscoring its dedication to compliance, security, and fostering regulatory frameworks that support the evolving digital economy.
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