Crypto.com Responds to SEC Wells Notice, Files Lawsuit
The cryptocurrency trading platform, Crypto.com, announced that its latest move comes in response to receiving a "Wells Notice" from the U.S. Securities and Exchange Commission (SEC). The SEC claims that the tokens traded on the platform may be considered securities.
A Wells Notice is a formal warning that SEC staff plan to recommend enforcement action against the recipient. The SEC did not immediately respond to a request for comment on the matter.
For some time, cryptocurrency companies have accused the SEC of overreaching and going beyond its regulatory authority, while the SEC maintains that the industry is ignoring securities laws meant to protect investors and other market participants.
“Our lawsuit alleges that the SEC has unilaterally expanded its jurisdiction beyond the legal boundaries, creating an unlawful rule that categorizes almost all crypto asset trades as securities transactions,” said Crypto.com.
Other major players in the digital asset industry, including Robinhood’s crypto business, Coinbase, and the NFT marketplace OpenSea, have also received similar Wells Notices from the SEC.
Crypto.com has filed a lawsuit in a federal court in Tyler, Texas, naming SEC Chairman Gary Gensler and four other commissioners as defendants.
Separately, Crypto.com has submitted a petition to both the Commodity Futures Trading Commission (CFTC) and the SEC seeking a joint interpretation that confirms certain cryptocurrency derivatives fall under the exclusive regulation of the CFTC. The CFTC did not immediately respond to a request for comment.
