Crypto.com is suing the SEC after receiving Wells’ notice

• Crypto.com has announced that the company has taken legal action against the SEC.
• The exchange received a Wells notice indicating that the company may be involved in the illegal sale of securities.
• CRO fell nearly 6% after the announcement.

Crypto.com revealed that it filed a lawsuit against the Securities & Exchange Commission (SEC) on Tuesday in response to a Wells notice it received from the regulator. In addition, the exchange filed a petition with the Commodities & Futures Trading Commission (CFTC) and the SEC to clarify whether certain derivatives are regulated exclusively by the CFTC.

Crypto.com Responds to SEC Wells Notice

In a blog post on Tuesday, Crypto.com announced that it had taken legal action against the SEC after receiving a Wells notice from the regulator.

The company noted that its action to sue a federal agency is unprecedented, but reflects a passion to “protect the future of the US crypto industry.” It also argues that the SEC’s regulatory approach to the crypto industry has expanded beyond the scope of its jurisdiction.

“Specifically, our lawsuit alleges that the SEC unilaterally expanded its jurisdiction beyond statutory limits,” Crypto.com said.

The company included that the SEC operates a system that places the trading of almost all crypto assets under securities trading – regardless of how they are sold. However, it stated that the SEC does not apply the same framework to cryptocurrencies such as Bitcoin and Ethereum, which are sold identically to other crypto assets.

The Crypto.com lawsuit follows a series of legal actions between the SEC and several crypto companies in recent months, including Coinbase, Binance, Ripple, Uniswap Labs, Robinhood and Consensys.

In addition, the exchange has petitioned the CFTC and the SEC to confirm, through a joint interpretation, that certain cryptocurrency derivatives are only under CFTC oversight. The company plans to use this approach to clarify regulations that protect the crypto industry.

“Crypto.com is committed to using all available regulatory tools to help bring certainty to the industry, including this petition for joint rulemaking under the Dodd-Frank Act,” the company wrote.

Following the announcement, Crypto.com’s native ticker CRO fell nearly 6%, extending its weekly loss to more than 8%.