Texas Crypto Firm Lejilex Sues SEC Following Overstretched Securities Classification
Texas-based cryptocurrency firm Lejilex has filed a lawsuit against the Securities and Exchange Commission (SEC) over securities labels on cryptocurrency assets.
The lawsuit filed on Feb 21 in a federal court in Fort Worth challenges the SEC’s jurisdiction in several actions affecting its business last year.
So this is huge. Today, @LEJILEX and the Crypto Freedom Alliance of Texas (CFAT) sued the SEC seeking a declaration that “secondary-market sales of digital assets like the ones that LEJILEX intends to facilitate through the https://t.co/FrN5OiTwYN are not sales of securities.”…
— Amanda Tuminelli (@amandatums) February 21, 2024
Last year, the company sought to create a cryptocurrency exchange and offer trading services around assets flagged by the SEC. The exchange was to list digital assets which had been classified as securities by the regulator.
The financial regulator increased pressure on the market in 2023, citing investor protection concerns in an attempt to rid the sector of bad actors.
As cryptocurrency fraud and scams surged, the SEC increased pressure by declaring some assets as securities, effectively putting them under its jurisdiction.
According to the regulator, this was done to impose the same level of scrutiny and criteria on those assets to avoid possible investor losses.
As a result, the SEC filed charges against Binance and Coinbase for offering trading services to unregulated securities.
Lejilax, alongside the Crypto Freedom Alliance of Texas (CFAT), filed a lawsuit against the SEC, claiming an extension of the regulator’s powers. The CFAT, a group that advocates for fair and responsible crypto policies, comprises big industry players like Coinbase and a16z crypto fund.
Both parties argue that the SEC
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