Crypto.com has taken a bold step by filing a lawsuit against the U.S. Securities and Exchange Commission (SEC) after receiving a Wells notice, which signals a potential future prosecution. The SEC aims to classify most crypto transactions as securities transactions, imposing tighter restrictions on the industry. Crypto.com is not the first company to take such legal action, but there is no definitive outcome yet.
The situation escalated on October 8, when the SEC issued a Wells notice to Crypto.com, marking the end of the agency’s investigation and its intention to prosecute. In response, Crypto.com’s CEO, Kris Marszalek, announced that the company would sue the SEC preemptively. Marszalek described the SEC’s actions as an “unauthorized overreach” that has negatively impacted over 50 million American crypto holders, and emphasized that the lawsuit is a necessary countermeasure to the SEC’s “regulation by enforcement” approach.
Crypto.com’s official statement strongly criticized the SEC, stating that such regulatory attacks are unfortunately part of running a legitimate exchange. The company argued that the SEC’s actions are inconsistent with the growing bipartisan support for crypto regulation in the U.S. government. Additionally, Crypto.com filed a petition with both the SEC and the Commodity Futures Trading Commission (CFTC), requesting clear confirmation that some crypto assets should be classified as commodities, not securities.
While this legal battle is still in its early stages, the announcement had an immediate impact, as Crypto.com’s native token, Cronos (CRO), saw a drop in price. Despite this bearish signal, the future of the case remains uncertain. Marszalek and his team are likely to pursue the case aggressively, which could provide clarity on the legal status of crypto exchanges in the U.S.
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