Crypto.com Sues SEC: Can This Lawsuit Redefine Digital Asset Regulation?
Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...
The U.S. Securities and Exchange Commission (SEC), under Chair Gary Gensler, has continued to increase its scrutiny of the cryptocurrency sector, issuing a Wells notice to Crypto.com, indicating the possibility of legal action against the firm.
In response, Crypto.com has filed a lawsuit against the SEC. The company published a statement and contended that the agency had exceeded its authority by creating de facto rules for digital assets without following proper legal procedures.
In an interview, Daniel Stabile and Kimberly Prior, co-chairs of Winston & Strawn LLP’s Digital Assets and Blockchain Technology Group, emphasized that this lawsuit could potentially reshape the regulatory landscape for crypto, as it directly challenges the SEC’s interpretation of its authority over digital assets.
According to Crypto.com’s statement, the lawsuit highlighted a key conflict over regulating digital assets. Crypto.com claimed the SEC has overstepped by treating various digital assets as securities without following the proper legal processes required under U.S. law.
The company argued that the SEC bypassed the notice and comment rulemaking process, as the Administrative Procedure Act required. This lawsuit challenged what Crypto.com views as improperly expanding the SEC’s authority.
“Crypto.com is alleging that the SEC has de facto created a rule already that essentially many types of digital assets are securities under U.S. law, and they did that without engaging in the traditional notice and comment rulemaking process, which is required
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