Crypto.com, a well-known cryptocurrency exchange, is optimistic about its legal case against the U.S. Securities and Exchange Commission (SEC), thanks to recent court rulings in favor of other crypto firms. Nick Lundgren, the company’s chief legal officer, believes these legal precedents put Crypto.com on solid ground in its lawsuit against the SEC.
On October 8, Kris Marszalek, co-founder and CEO of Crypto.com, announced that the company had filed a lawsuit against the SEC in response to a Wells notice it received from the regulator. The exchange argues that the SEC’s actions amount to “unauthorized and unjust regulation.” There is also hope that the next U.S. presidential administration could offer a more positive and efficient approach to regulating cryptocurrencies.
Recent Legal Victories in the Crypto Industry
The crypto industry has secured several important legal victories against the SEC in recent years, offering hope to firms like Crypto.com. In August 2024, Grayscale Investments won a case allowing it to convert its Bitcoin Trust into a spot Bitcoin exchange–traded fund (ETF). This followed other rulings, such as the one in July 2023, where the courts decided that XRP is not a security when traded on digital asset exchanges. This decision led to XRP’s return to major exchanges worldwide.
Nick Lundgren stated that these rulings are pivotal for Crypto.com‘s case, confirming the broader sentiment within the crypto industry that cryptocurrencies themselves are not securities. “These legal rulings strengthen our position in our lawsuit, and we are confident that the U.S. Judicial Branch will provide the regulatory clarity the SEC has failed to offer,” Lundgren said.
Continuing U.S. Operations Despite the Wells Notice
A Wells notice is typically issued by the SEC to notify a company that it might face charges for violating securities laws. However, this notice does not automatically force the company to halt its U.S. operations. Michael Gold, a legal expert, explained that receiving a Wells notice allows a company to respond with a formal submission to argue against the potential charges.
Gold added, “A Wells notice doesn’t require a company to stop operating. They can continue their business while defending their case in court.”
Crypto.com’s U.S. Market Presence
Though headquartered in Singapore, Crypto.com expanded its services to the U.S. in March 2022, initially targeting institutional investors. However, in June 2023, the company paused its institutional services in the U.S. due to low demand, just after the SEC sued Coinbase over allegations of unregistered securities offerings.
Despite this, Crypto.com reportedly continued offering retail services in the U.S., and some users on social media have confirmed that the platform remains fully operational for retail customers.
Summary Review: Crypto.com is optimistic in its legal battle with the SEC, citing recent court rulings that favor the crypto industry. These legal precedents, including key victories by Grayscale and XRP, offer hope for Crypto.com as it continues to challenge what it describes as unjust SEC regulations. Despite receiving a Wells notice, the company continues to operate in the U.S., defending its stance on the lawful nature of its business.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
