Crypto.com Fights Back: Lawsuit Challenges SEC's Power in Regulating Crypto
Cryptocurrency exchange Crypto.com is taking a stand against the U.S. Securities and Exchange Commission
prativad 
Cryptocurrency exchange Crypto.com is taking a stand against the U.S. Securities and Exchange Commission (SEC), filing a lawsuit that accuses the regulator of exceeding its authority in governing the crypto industry.
This move comes after Crypto.com received a Wells Notice, a formal warning from the SEC indicating potential enforcement action. The company argues the SEC's actions threaten the future of crypto and are based on an unlawful assumption that most crypto assets are securities.
"We believe the SEC is overstepping its legal bounds," said Crypto.com in a statement. They claim the SEC is unfairly targeting the industry without clear guidelines and is attempting to regulate all crypto as securities, regardless of their functionality.
Crypto.com isn't alone. Other major players like Robinhood's crypto arm, Coinbase, and OpenSea have also received Wells Notices. This lawsuit challenges the SEC's broad interpretation of its authority and seeks to clarify which crypto products fall under the CFTC's (Commodity Futures Trading Commission) jurisdiction.
The lawsuit is a response to a broader US regulatory push following the 2022 collapse of FTX, a crypto exchange revealed to be a fraudulent scheme. Crypto companies argue the SEC's approach stifles innovation, while the SEC insists on protecting investors through existing regulations.
With the SEC's crypto-related actions increasing significantly in 2023, Crypto.com's lawsuit could set a precedent for future clashes between regulators and the crypto industry. This story is likely to continue as both sides fight for control over the fast-evolving digital asset landscape.
