Gushiken Yona
Crypto.com throws down the gauntlet, launching a legal salvo against the U.S. Securities and Exchange Commission. The cryptocurrency exchange seeks to halt what it calls an “unjust” regulatory crusade, escalating a battle that is reshaping the future of digital assets in America.
The Singapore-based company filed suit against the SEC just days after receiving a Wells notice, a harbinger of potential enforcement action. Crypto.com’s aggressive move, announced in a blog post on Tuesday, marked a dramatic escalation in the ongoing tension between the cryptocurrency industry and regulators.
The firm argued the SEC had overstepped its bounds, unilaterally expanding its jurisdiction over digital assets and crafting rules without proper public input. Crypto.com pointedly challenged the SEC’s seemingly arbitrary distinction between Bitcoin and Ether, which the agency has generally refrained from classifying as securities, and other cryptocurrencies, which the SEC frequently targets.
The exchange argued that many digital assets share similar characteristics with Bitcoin and Ether and are sold in the same manner, yet face different regulatory scrutiny. Echoing a growing chorus of industry discontent, Crypto.com accused the SEC of “regulation by enforcement,” a tactic it claimed stymied innovation and threatened the future of the crypto industry in the United States.
The company’s CEO, Kris Marszalek, amplified this message on X (formerly Twitter), criticizing the SEC’s “unauthorized overreach” and declaring the company “very bullish” on the American crypto market despite the regulatory headwinds. This legal broadside was not fired in isolation.
Crypto.com joined a growing rank of crypto firms, including Coinbase and Consensys, that have taken the SEC to court. These companies contended that the SEC’s approach lacked clarity and consistency, creating a chilling effect on the nascent industry.
Consensys, for example, filed suit in April, challenging, among other things, the SEC’s stance on Ether. Coinbase has launched multiple legal actions against the SEC, accusing the agency of refusing to establish clear rules for digital assets.
In a parallel maneuver, Crypto.com’s derivatives arm, Crypto.com | Derivatives North America (CDNA), petitioned the SEC and the Commodity Futures Trading Commission (CFTC) for a joint interpretation of the regulatory status of certain cryptocurrency derivatives. This petition invoked the Dodd-Frank Act, seeking to clarify whether these products fell under the jurisdiction of the CFTC, the SEC, or both.
Crypto.com emphasized its commitment to compliance, highlighting its registration with FinCEN as a money services business, its numerous state money transmitter licenses, and CDNA’s registration with the CFTC. The company portrayed its lawsuit not as an act of defiance but as a necessary defense against what it considered regulatory overreach. It expressed confidence that its strong compliance record and recent court rulings against the SEC would bolster its case.
Despite the legal battle, Crypto.com insisted it was “business as usual,” continuing its mission to “put crypto in every wallet.” The company’s lawsuit, however, signaled anything but business as usual in the broader crypto landscape. The clash between the industry and the SEC was intensifying, with potentially far-reaching consequences for the future of digital assets in the United States.
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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
