Crypto.com Challenges SEC in Court, Defends Crypto Industry

Singapore-based cryptocurrency exchange, Crypto.com, is taking legal action against the U.S. Securities and Exchange Commission (SEC), becoming the latest major player in the industry to push back against the regulator. The move follows the exchange’s receipt of a Wells notice, which typically signals that the SEC is investigating an entity for potential violations.

Crypto.com’s Lawsuit Against SEC’s Overreach

In response to the SEC’s regulatory actions, Crypto.com announced its decision to file a lawsuit. The exchange expressed concerns over the SEC’s increasing authority over the crypto industry, which it argues exceeds its legal boundaries. In a public statement, Crypto.com said, “Today, Crypto.com has filed suit against the U.S. Securities and Exchange Commission (SEC). We are doing so to protect the future of the crypto industry in the U.S., joining a series of our peers who are actively defending themselves and taking action against a misguided federal agency acting beyond its authorization under the law.”

The lawsuit challenges the SEC’s assertion that nearly all crypto asset transactions should be treated as securities, except for those involving Bitcoin (BTC) and Ethereum (ETH). Crypto.com argues that this stance is arbitrary and violates the Administrative Procedure Act, as it did not follow the required notice and comment process. The company insists that crypto assets with characteristics similar to those of BTC and ETH should not be classified differently.

Kris Marszalek, CEO of Crypto.com, also voiced his frustration with the SEC’s approach on X (formerly Twitter). He stated, “The SEC’s unauthorized overreach and unlawful rulemaking regarding crypto must stop. Recent rulings have made clear that crypto is not itself a security and thus is not an investment contract simply because it changes hands.”

Marszalek reaffirmed the company’s optimism about the U.S. crypto market and its future plans to expand offerings for U.S. customers, despite regulatory hurdles. The full filing of Crypto.com’s lawsuit is available for public review.