Crypto.com Sues SEC to ‘Protect’ Crypto’s Future in the U.S.

• Crypto.com has sued the U.S. Securities and Exchange Commission (SEC).
• The development came after the exchange received the regulator’s Wells notice.
• Crypto.com said its action aimed to “protect” the crypto industry’s future in the U.S.

Crypto.com announced Tuesday that it had filed a lawsuit against the U.S. Securities and Exchange Commission ( SEC ) to “protect” the future of the country’s digital asset industry.

The exchange said its decision to sue the SEC followed a Wells notice from the regulator. The SEC typically sends a Wells notice as one of the final steps before it issues formal charges against a company. In this case, the notice laid out the framework of the regulatory argument and offered Crypto.com an opportunity to dispute the SEC’s claim.

Crypto.com Counters the SEC’s Wells Notice

According to a statement on October 8, Crypto.com’s lawsuit against the SEC contends that the regulator has “unilaterally” expanded its jurisdiction beyond statutory limits and has established an “unlawful” rule that nearly all crypto asset trades besides Bitcoin (BTC) and Ether (ETH) qualify as securities transactions.

“This unlawful rule never went through a notice and comment period required by the Administrative Procedure Act and furthermore the agency’s application thereof is arbitrary and capricious, particularly when those crypto assets possess virtually indistinguishable characteristics from and are sold in an identical manner as BTC and ETH,” The statement read.

Crypto.com, through Derivatives North America (CDNA), has filed a petition with the U.S. Commodity Futures Trading Commission (CFTC) and SECA to confirm via joint interpretation that the CFTC solely regulates certain crypto derivative products.

Noting that it intended to leverage all regulatory tools to bring certainty to the domestic crypto industry, Crypto.com affirmed that it was registered as a money services business with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).

The exchange said it also maintained over 40 state money transmitter licenses that enable its business to operate in the country.

Stay updated on Crypto.com’s partnership with 21Shares’ parent company:
21.co Taps Crypto.com for Bitcoin Liquidity and Custody Services

Read why the Ripple vs. SEC legal battle could extend to 2027:
Ripple vs SEC Legal Battle Could Extend to 2027—Here’s Why