Crypto.com has filed a suit against the US Securities and Exchange Commission (SEC) after receiving a Wells notice from SEC. A Wells notice is a letter sent by the SEC that states that the commission is planning to initiate enforcement against the recipient.
By filing the suit, Crypto.com joins its peers to “protect the future of the crypto industry” in the US, it says in its Oct 8 statement.
“Our lawsuit contends that the SEC has unilaterally expanded its jurisdiction beyond statutory limits and separately that the SEC has established an unlawful rule that trades in nearly all crypto assets are securities transactions no matter how they are sold, whereas identical transactions in bitcoin (BTC) and ether (ETH) are somehow not,” reads the filing.
“This unlawful rule never went through a notice and comment period required by the Administrative Procedure Act and furthermore the agency’s application thereof is arbitrary and capricious, particularly when those crypto assets possess virtually indistinguishable characteristics from and are sold in an identical manner as BTC and ETH,” it adds.
Crypto.com received its Major Payment Institution (MPI) licence for Digital Payment Token (DPT) services by the Monetary Authority of Singapore (MAS) in June last year. The licence means Crypto.com will get to provide end-to-end cryptocurrency payment services for businesses including crypto payouts and remittances.
“This unprecedented action by the company against a federal agency is a warranted response to the SEC’s regulation by enforcement regime which has hurt more than 50 million American crypto holders,” says Kris Marszalek, co-founder and CEO of Crypto.com.
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“And to use all regulatory tools available to bring certainty to the industry through proper rulemaking, Crypto.com has also filed a petition with the CFTC and SEC to confirm crypto derivative products categorisation,” Marszalek adds.
