FX168 Financial News Agency (Asia Pacific) - The large crypto exchange, Crypto.com, confirmed on Tuesday, October 8th, that it has received a "Wells Notice" from the U.S. Securities and Exchange Commission (SEC), an informal reminder issued by regulatory agencies before civil litigation. In fact, the exchange stated that it has filed a lawsuit against the SEC, accusing them of unfair regulation.

According to Watcher.Guru, Crypto.com emphasized that receiving the "Wells Notice" clearly demonstrates unauthorized and unfair regulation by the U.S. SEC in enforcement actions, which has been a long-standing issue. Therefore, they have taken legal action against the SEC's actions.

(Source: Twitter)

The official statement from the exchange reads: "Crypto.com has filed a lawsuit against the U.S. SEC. We do this to protect the future of the U.S. crypto industry, actively defend ourselves alongside our peers, and take action against a federal institution that has gone astray beyond legal authorization."

(Source: Crypto.com)

"We decided to sue the U.S. SEC because we received a Wells Notice from the committee staff. The notice indicates that despite both parties indicating that the next government will promote the development of U.S. cryptocurrency in a more constructive and effective manner, the unauthorized and unfair enforcement supervision by the SEC continues. Currently, the SEC's improper enforcement actions are part of the legitimate and licensed cryptocurrency operations in the U.S. Although our company's lawsuit against a federal institution is unprecedented, their actions in our industry have left us with no choice."

Specifically, our lawsuit argues that the SEC unilaterally expanded its jurisdiction beyond statutory limits and regulatory agencies established an illegal rule that virtually all trading of crypto assets is securities trading, regardless of how they are sold, while the same transactions of bitcoin (BTC) and ether (ETH) are not.

This illegal provision has never undergone the required notice and comment period under the Administrative Procedures Act, and the application of this provision by the agency is arbitrary and capricious, especially when these crypto assets have features that are virtually indistinguishable from bitcoin and ether and are sold in the same manner.

Crypto.com reiterated: "We seek to stop the SEC from exceeding its authority and engaging in illegal actions that violate federal law."

In recent years, the SEC and cryptocurrencies have been in a state of conflict. The agency firmly believes that the cryptocurrency industry has been avoiding proper disclosures to customers. Furthermore, they continue to enforce regulation through enforcement actions. As a result, cryptocurrency companies are in a rather unfortunate situation.

This position was maintained in the Crypto.com incident on Tuesday, but an interesting shift occurred as Crypto.com chose a swift response.

It is worth noting that in the USA, Crypto.com is registered with the Financial Crimes Enforcement Network (FinCEN) as a money services business and holds money transmission licenses in over 40 states, allowing the exchange to operate. Additionally, Crypto.com's subsidiary CDNA is registered with the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO). These licenses and registrations demonstrate our commitment to complying with various US regulatory regimes applicable to Crypto.com's business.Futures Trading Commission (CFTC)'s latest data shows that investors are significantly reducing their net short positions in US soybean, corn, and wheat contracts, easing bearish sentiment in the market.Committee (CFTC). These licenses and registrations indicate our commitment to complying with various US regulatory regimes applicable to Crypto.com's business.

Crypto.com concluded: "We believe that security and compliance are the foundation for achieving mainstream adoption of cryptocurrencies, and everything we do is centered around security, protection, and compliance. We are proud to be a global leader in industry licensing, registration, and security certifications - with over 100 regulatory approvals to operate in jurisdictions worldwide and to support the regulatory framework designed for today's digital economy, as well as top-notch security and protection certification. Since its establishment in 2016, Crypto.com's commitment to compliance has always been our top priority, and without fully adhering to this commitment, we cannot achieve our industry-leading position."

"We believe that our international recognition of regulatory compliance commitments and the recent court ruling against participants in the cryptocurrency industry by the US Securities and Exchange Commission puts us in a winning position to challenge their unfair practices. While regrettable, we believe the US Department of Justice will help provide much-needed restraint on the arbitrary actions of the current leadership at the US Securities and Exchange Commission regarding cryptocurrencies, and validate our claims. Our success in this matter will reaffirm our compliance operation to benefit our customers and the entire industry in the USA."