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Crypto.com Sues SEC After Receiving a Wells Notice

Twitter icon  •  Published 1 month ago  •  Hassan Maishera

Cryptocurrency exchange Crypto.com has sued the SEC, its chairman, and four commissioners after receiving a Wells Notice from the regulator.

TL;DR

  • The US SEC issued Crypto.com a Wells Notice, notifying the exchange that it was investigating its activities.

  • Crypto.com has subsequently sued the regulator, Chair Gary Gensler, and its four commissioners.

Crypto.com Sues the SEC

crypto.com, one of the leading cryptocurrency exchanges in the world, announced on Tuesday that it had sued the U.S. Securities and Exchange Commission, Chair Gary Gensler, and its four commissioners.

This latest development comes after the regulator issued a Wells Notice to the company. Wells Notice notifies a company that an enforcement action might be coming.

According to the court filing, Crypto.com claimed that the case against the SEC was made "to protect the future of crypto in the U.S."

The regulator issued the Wells Notice on August 22nd. SEC has issued a Wells Notice to several cryptocurrency companies, including OpenSea, Consensys, Uniswap, Robinhood, and ShapeShift. 

In its suit, Crypto.com said it "seeks declaratory and injunctive relief to prevent the Securities and Exchange Commission ('SEC') from unlawfully expanding its jurisdiction to cover secondary-market sales of certain network tokens sold on the company's platform."

The suit alleges that the SEC brands network tokens, except for Bitcoin (BTC) and Ethereum's ether (ETH), as securities. Crypto.com added that the SEC issued the Wells Notice because the crypto exchange offers trading of other cryptocurrencies and for operating as an unregistered broker-dealer and securities clearing agency under federal securities laws.

The SEC has yet to list the tokens traded on Crypto.com, which it considers securities. The cryptocurrency exchange is seeking a ruling that none of the tokens on its platform are securities, and it doesn’t operate as an unregistered securities broker-dealer or securities clearing agency.

Industry experts and participants continue to call on the U.S. government to create clear rules for the cryptocurrency market, which would provide clarity for companies operating in the space.

 

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Author

Hassan Maishera

Hassan is a Nigeria-based financial content creator that has invested in many different blockchain projects, including Bitcoin, Ether, Stellar Lumens, Cardano, VeChain and Solana. He currently works as a financial markets and cryptocurrency writer and has contributed to a large number of the leading FX, stock and cryptocurrency blogs in the world.