Crypto.com Takes Legal Action Against SEC Over Crypto Regulation
In a bold move, Crypto.com has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), challenging the regulatory body's approach to crypto assets. This legal action comes in response to what the company deems as overreach by the SEC in its regulation of the cryptocurrency industry.
Despite receiving a Wells notice from the SEC, Crypto.com assures its customers that operations will continue as usual as it contests the SEC's stance in court. The company argues that the SEC's tactics go beyond its legal boundaries, even amidst hints that the next administration may take a more favorable stance toward the crypto sector.
Other crypto companies, including NFT marketplace OpenSea, crypto exchanges Coinbase and Kraken, and trading app Robinhood, have also received similar Wells notices from the SEC.
In its lawsuit, Crypto.com claims that the SEC has unlawfully expanded its jurisdiction by classifying most crypto assets as securities, excluding major assets like Bitcoin and Ethereum. The company argues that this classification was made without proper legal process and lacks a consistent rationale, as transactions in many crypto assets resemble those of BTC and ETH.
Additionally, Crypto.com has submitted a petition to the Commodity Futures Trading Commission (CFTC) and SEC to clarify regulatory authority over certain cryptocurrency derivatives. The firm argues that these products should fall solely under the CFTC's jurisdiction, seeking a more definitive regulatory framework for the industry.
Despite these legal challenges, Crypto.com highlights its regulatory approvals and certifications, including registration with FinCEN and over 40 state money transmitter licenses in the U.S. The exchange emphasizes its commitment to maintaining regulatory compliance and security certifications.
On a positive note, Crypto.com has seen significant growth in spot and derivatives trading volume, with a 40% increase month-to-month in September. The exchange has also experienced the biggest gain in spot trading market share, reaching 10.5% this year.
In conclusion, Crypto.com's legal battle with the SEC reflects the ongoing struggle for regulatory clarity in the crypto industry. Understanding these developments is crucial for investors and traders as they navigate the evolving landscape of cryptocurrency regulation, which can have a significant impact on their financial decisions and investments.