- Crypto.com files lawsuit against the SEC, calling their regulations “unauthorized and unjust.”
- Legal victories, like Grayscale’s and Ripple’s cases, boost Crypto.com’s confidence in court.
- Crypto.com continues operations in 49 US states despite receiving a Wells notice from the SEC.
Crypto.com has initiated legal action against the United States Securities and Exchange Commission (SEC), following the agency’s issuance of a Wells notice. CEO Kris Marszalek announced the lawsuit on October 8, accusing the SEC of “unauthorized and unjust regulation.” The company hopes the US judicial system will provide clarity on cryptocurrency regulations that the SEC has yet to establish.
This legal move comes after a series of recent court victories for the cryptocurrency industry. In August 2024, Grayscale Investments successfully converted its over-the-counter Bitcoin trust into a spot Bitcoin exchange-traded fund (ETF), a ruling seen as a major blow to the SEC. Similarly, in July 2023, the courts ruled that XRP is not a security when traded on digital asset exchanges, allowing the token to return to exchanges worldwide.
Legal Rulings Bolster Confidence
Crypto.com’s chief legal officer, Nick Lundgren, pointed out that these court decisions give the company strong legal backing in its fight with the SEC. He remarked that the rulings have affirmed what many in the crypto industry have believed—that cryptocurrency itself is not a security. Lundgren expressed optimism that the court system would ultimately provide the regulatory certainty the SEC has failed to deliver.
The Wells notice, which informs a company of potential charges for violating securities laws, does not prevent Crypto.com from continuing its operations in the United States. Legal experts have explained that the company has the right to respond to the notice with arguments defending its actions.
Ongoing US Operations Despite Wells Notice
Despite the regulatory pressure, Crypto.com continues its US operations. Although the company suspended its institutional platform in the country in June 2023 due to limited demand, retail services reportedly remain available in 49 states. Crypto.com has a local headquarters in Texas, though services are not yet offered in New York as the company works to obtain the necessary regulatory approvals.
The exchange has seen considerable growth, surpassing Coinbase in trading volume in August 2024 with $3.2 billion in daily trading. According to Crypto.com’s managing director, Giuseppe Giuliani, this growth is due to favorable market conditions and new institutional clients.
