Legal Showdown Between Crypto.com and the SEC

In its lawsuit, Crypto(.)com argues that the SEC has overextended its legal authority by classifying most cryptocurrencies as securities

Crypto(.)com has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), accusing the agency of overstepping its jurisdiction and enforcing unauthorized regulations that could harm the crypto sector.

In its lawsuit, Crypto(.)com argues that the SEC has overextended its legal authority by classifying most cryptocurrencies as securities without following the proper rulemaking or getting congressional approval.

According to Crypto(.)com, this approach is harmful to the broader crypto ecosystem in the U.S., creating uncertainty for businesses that are trying to operate within legal frameworks.

“We are doing this to protect the future of the crypto industry in the U.S.,” the company said in its statement, joining other crypto firms that are pushing back against what they perceive as the SEC’s regulatory overreach.

The suit claims that the SEC invented a new category, "Crypto Asset Security," without following the proper rulemaking procedures outlined in the Administrative Procedure Act (APA). Crypto.com believes this unauthorized expansion has created confusion and hindered lawful businesses from operating efficiently.

Seeking Regulatory Clarity

In addition to the lawsuit, Crypto(.)com has filed a petition with the Commodity Futures Trading Commission (CFTC) and the SEC. This petition seeks clarification on which agency regulates certain cryptocurrency derivatives.

Specifically, the firm aims to confirm that certain digital products fall solely under the CFTC's jurisdiction, reflecting the company's broader effort to bring regulatory certainty to the industry.

Despite the legal battle, Crypto(.)com maintained its continued focus on compliance. The company is registered as a money services business with the Financial Crimes Enforcement Network (FinCEN) and holds over 40 state money transmitter licenses, along with multiple licenses globally.

“Our compliance and security efforts are at the core of our operations, and we remain committed to working within regulatory frameworks,” Crypto.com noted.

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