As a seasoned analyst with years of experience navigating the complex world of financial regulations and emerging technologies, I find myself intrigued by Crypto.com’s bold move against the SEC. With a background in both traditional finance and blockchain technology, I can appreciate the nuances of this situation.
On October 8, Crypto.com made public their decision to file a lawsuit against the U.S. Securities and Exchange Commission (SEC). The reason for this action was a Wells notice from the SEC, which Crypto.com believes is an example of the agency’s excessive involvement in regulating the cryptocurrency sector.
On social media platform X, Kris Marszalek, the Co-Founder and CEO of Crypto.com, expressed his worries, urging, “The Securities and Exchange Commission (SEC) should halt its unapproved expansion and illegal rulemaking concerning cryptocurrencies.
Crypto.com asserts that the Securities and Exchange Commission (SEC) has been inconsistent in their classification of cryptocurrency transactions, labeling almost all but Bitcoin (BTC) and Ether (ETH) as securities. They argue this classification is unfair and lacking justification, as similar activities involving BTC and ETH are treated differently. The legal action also alleges that the SEC enforced this rule without adhering to the necessary public notice and comment period under the Administrative Procedure Act, thereby making their actions unjustified and illegal.
Furthermore, Crypto.com’s associated entity, Crypto.com | Derivatives North America (CDNA), has submitted a petition to both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). This petition aims to obtain clarification on the regulatory supervision of certain cryptocurrency derivatives, specifically asking for a joint decision on whether these financial products should be governed by the CFTC, the SEC, or a combination of both.
Crypto.com underlines its dedication to adhering to regulations, stating it possesses more than 40 state money transmitter licenses and is recognized as a money services business by FinCEN. Furthermore, they mentioned that their affiliate is registered with the CFTC, functioning as a designated contract market and derivatives clearing organization.
In response to the Securities and Exchange Commission’s (SEC) “regulation by enforcement” approach that has negatively impacted over 50 million U.S. cryptocurrency owners, our company felt it necessary to take an uncommon step in challenging a federal agency’s actions.
— Kris | Crypto.com (@kris) October 8, 2024
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2024-10-09 10:33