Crypto.com Sues SEC

(Reuters) – Crypto.com filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) on Tuesday, alleging overreach in regulating the cryptocurrency industry.

The lawsuit follows a 'Wells notice' from the SEC, indicating that the agency considers tokens traded on Crypto.com to be securities. A Wells notice signals the agency's intention to recommend enforcement action.

Crypto companies argue that the SEC is exceeding its jurisdiction, while the SEC claims the industry disregards securities laws meant to safeguard investors and market participants.

Crypto.com asserts in its lawsuit that the SEC is unlawfully extending its jurisdiction and establishing a rule declaring nearly all crypto asset trades as securities transactions.

Other companies, including Robinhood's crypto business, Coinbase, and the NFT marketplace OpenSea, have received similar notices from the SEC.

The case was filed in federal court in Tyler, Texas, naming SEC Chair Gary Gensler and four commissioners as defendants. Additionally, Crypto.com has requested a joint interpretation from the Commodity Futures Trading Commission (CFTC) and the SEC to clarify that certain cryptocurrency derivative products fall under CFTC regulation.

The CFTC did not respond to requests for comment.