Crypto.com, a leading cryptocurrency exchange, has filed a lawsuit against the United States Securities and Exchange Commission (SEC), in response to a notice of impending legal action from the governmental body. The exchange disclosed receiving the Wells Notice from the SEC, which is essentially an indication of imminent legal action over alleged securities violations.
The contentious relationship between the SEC and the cryptocurrency industry has been ongoing for several years. The SEC maintains that many crypto institutions deliberately evade obligatory disclosures to their customers and has backed regulatory enforcement. This stance had led to an increasing number of crypto entities finding themselves on the regulator’s radar.
Interestingly, Crypto.com has chosen not to back down, joining a growing list of crypto firms that have received such a notice. On the contrary, they’ve taken a proactive stance by filing a lawsuit against the SEC, stating their intention “to safeguard the future of the crypto industry in the US”. In alignment with their action, Derivatives North America announced it is filing a petition with the CFTC and SEC to ascertain “crypto Derivatives Products Regulation.”
Crypto.com described unfavorable SEC enforcement actions as part of the challenge of operating a valid, licensed crypto business in the US. While the lawsuit represents uncharted territory for Crypto.com, the company assures that the SEC’s actions towards the industry have left them with no other viable alternative.