Crypto.com sues SEC after receiving Wells notice

Crypto.com revealed that it filed a lawsuit against the Securities & Exchange Commission (SEC) on Tuesday in response to a Wells notice that it received from the regulatory body. Additionally, the exchange filed a petition to the Commodities & Futures Trading Commission (CFTC) and the SEC to clarify if certain derivative products are solely regulated by the CFTC.

Crypto.com responds to SEC Wells notice

In a blog post on Tuesday, Crypto.com announced that it has taken legal action against the SEC after it received 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 crypto industry in the US." It also argues that the SEC's regulatory approach toward the crypto industry has extended beyond the scope of its jurisdiction. 

"Specifically, our lawsuit contends that the SEC has unilaterally expanded its jurisdiction beyond statutory limits," Crypto.com stated.

The company included that the SEC operates a system that places the trading of nearly all crypto assets under securities trading — no matter how they are sold. However, it stated that the SEC doesn't apply the same framework to cryptocurrencies like Bitcoin and Ethereum, which are sold identically to other crypto assets.

Crypto.com's 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.

Additionally, the exchange filed a petition with the CFTC and SEC to confirm via joint interpretation that certain cryptocurrency derivative products are under the watch of the CFTC only. The company intends to use this approach to bring clarity to regulations guarding the crypto industry.

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

Following the announcement, CRO, Crypto.com's native token, has declined nearly 6%, extending its weekly loss to over 8%.