Crypto.com Sues SEC After Receiving Wells Notice, Seeks to Block Jurisdiction Over Token Sales
Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk and Bitcoin Magazine.
Crypto.com filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) after receiving a Wells notice on October 8, 2024.
The Wells notice, issued by the SEC, indicates the agency may take enforcement action related to Crypto.com’s token sales.
Today, https://t.co/pFc4Pz9nFR filed suit against the SEC to protect the future of crypto in the U.S.: https://t.co/kXxyhF7zFe
The notice is part of the SEC’s broader regulatory crackdown on cryptocurrency firms, with the agency claiming that most cryptocurrency transactions are securities under federal law.
In response, Crypto.com argues that the SEC has overreached its authority and is using enforcement measures rather than creating clear rules through the proper legal channels.
By taking legal action, Crypto.com joins a growing list of crypto companies challenging the SEC’s regulatory approach.
The lawsuit focuses on the SEC’s classification of network tokens as “Crypto Asset Securities” under federal law, which Crypto.com contends is an overreach of the agency’s powers.
Crypto.com argues in its complaint that the SEC is relying on an “unlawful de facto rule” that designates most network tokens, when traded, as securities under the Securities Act and the Exchange Act.
According to Crypto.com, this unauthorized expansion of jurisdiction amounts to the SEC creating new rules without going through the formal rulemaking process required by the Administrative Procedure Act.
The platform is seeking declaratory and injunctive relief to stop the SEC from enforcing these rules. One of Crypto.com’s key
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