Bitrabo Editorial
On Tuesday, the digital asset exchange Crypto.com became the newest focus of scrutiny from the U.S. Securities and Exchange Commission (SEC), which has aggressively pursued regulatory actions over the past year. This follows previous investigations into trading platforms like Robinhood just months earlier.
Crypto.com Claims SEC Is Exceeding Its Authority
After receiving a Wells Notice from the SEC, Crypto.com has initiated legal proceedings against the agency to protect the future of the cryptocurrency sector in the United States. They expressed the importance of this action, stating:
Our goal is to defend the crypto industry’s future in the U.S. alongside others in our industry facing an overreaching federal entity acting beyond its legal limits.
Crypto.com asserts that the SEC is overstepping by broadly categorizing almost all cryptocurrency transactions as securities, with exceptions only for Bitcoin (BTC) and Ethereum (ETH).
The exchange argues that this differentiation lacks a strong legal foundation and does not follow the necessary regulatory protocols, including the notice-and-comment requirement of the Administrative Procedure Act.
According to Crypto.com, the SEC’s enforcement measures are “arbitrary and capricious,” especially since many cryptocurrencies share similar features and transaction methods as BTC and ETH. The company aims to stop what it views as the SEC’s unlawful actions that surpass its legal authority and violate federal law.
Request for CFTC Regulation on Crypto Derivatives
Alongside the lawsuit, Crypto.com | Derivatives North America (CDNA) has submitted a petition to both the SEC and the Commodity Futures Trading Commission (CFTC).
This petition seeks to establish a clear regulatory framework for certain cryptocurrency derivative products, asking for a joint ruling that would place these products entirely under CFTC jurisdiction.
The involved agencies have a period of 120 days to respond, either by creating a jointly endorsed interpretation or by providing written justifications for any refusals.
As of the latest update, the ecosystem token of Crypto.com, Cronos (CRO), is priced at $0.075, reflecting a 5% drop over the past hour.
Image sourced from DALL-E; chart from TradingView.com