In a bold move to defend the cryptocurrency industry, major exchange Crypto.com has filed a lawsuit against the United States Securities and Exchange Commission (SEC). The announcement, made by co-founder and CEO Kris Marszalek on October 8, comes in response to a Wells notice received from the SEC, signaling potential enforcement actions against the company.
Marszalek emphasized that this unprecedented legal action is a necessary response to what he describes as the SEC’s “regulation by enforcement” approach, which he claims has adversely affected over 50 million American crypto holders. In his statement, he expressed the company’s commitment to protecting the future of crypto in the U.S. and joining other industry peers in challenging the SEC’s overreach.
Crypto.com argues that the SEC has unlawfully expanded its jurisdiction, asserting that nearly all crypto asset trades are classified as securities transactions, regardless of how they are sold. The exchange contends that this interpretation is not only misguided but also detrimental to the growth and innovation of the crypto sector.
In addition to the lawsuit, Crypto.com has petitioned both the SEC and the Commodity Futures Trading Commission (CFTC) to clarify the regulatory status of certain cryptocurrency derivative products, seeking to establish that these products should be solely regulated by the CFTC. The company is advocating for clearer rulemaking to provide certainty for market participants.
Despite the legal challenges, Crypto.com reassured its users that it remains operational and committed to its mission of expanding crypto access. The exchange’s lawsuit against the SEC marks a significant moment in the ongoing dialogue about cryptocurrency regulation in the U.S., as industry players push back against what they perceive as excessive regulatory scrutiny. As the situation unfolds, the outcome of this legal battle could have far-reaching implications for the future of crypto regulation in the country.