Crypto.com filed a lawsuit against the US Securities and Exchange Commission on Tuesday, claiming the federal agency is overstepping its authority by regulating the cryptocurrency industry.

The crypto trading platform said its move followed the receipt of a “Wells Notice” from the US’s top markets regulator on the basis that tokens traded on its platform qualify as securities.

Wells’ notice is a formal statement that the regulator’s staff intends to recommend implementation of the measures. The SEC declined to comment.

Crypto companies have long accused the SEC of overstepping and violating its mandate, while the agency has argued that the industry is violating securities laws meant to protect investors and other market participants.

“Our lawsuit alleges that the SEC has unilaterally expanded its jurisdiction beyond statutory limits and separately that the SEC has established an illegal rule under which trades in virtually all crypto assets are securities transactions,” Crypto.com said.

Retail trading platform Robinhood’s crypto business, major US crypto exchange Coinbase and NFT marketplace OpenSea are among companies in the digital asset industry that have received similar notices from the SEC.

The Crypto.com case, filed in federal court in Tyler, Texas, also names SEC Chairman Gary Gensler and four other commissioners as defendants.

Separately, the company filed a petition with the Commodity Futures Trading Commission and the SEC, seeking joint interpretation to confirm that certain cryptocurrency derivatives are regulated solely by the CFTC.

The CFTC did not immediately respond to a Reuters request for comment.

© Thomson Reuters 2024

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