UK Investment Guides Loader

Crypto firm sues SEC for 'overreach' on digital assets

written by Bella Palmer
digital-assets

Lejilex and lobbying group Crypto Freedom Alliance of Texas (CFAT) claim the Securities and Exchange Commission has claimed jurisdiction over the industry without a "clear statutory mandate"

A U.S. crypto currency company and an industry group sued the U.S. Securities and Exchange Commission (SEC) on Wednesday, saying the regulator has overreached its authority and asking a judge to rule that digital assets traded on exchanges are not securities.

Texas-based crypto firm Lejilex and lobbying group Crypto Freedom Alliance of Texas (CFAT) claim the Securities and Exchange Commission has claimed jurisdiction over the industry without a "clear statutory mandate."

Lejilex says it seeks to run a crypto currency platform called Legit.Exchange. The firm formed in 2023 said it plans to list digital assets including those the Securities and Exchange Commission has deemed securities in lawsuits against Coinbase, the biggest crypto currency exchange in the U.S., and Binance, the world's biggest crypto exchange.

Lejilex wants the court to rule that listing pre-existing tokens will not breach securities laws.

We wish we were launching our business instead of filing a lawsuit, but here we are, stated Lejilex co-founder Mike Wawszczak.

Both Coinbase and Binance have denied the Securities and Exchange Commission's allegations.

Crypto Freedom Alliance of Texas asked the court to block the Securities and Exchange Commission from suing its members, and said the agency's assertion of jurisdiction over digital assets has made it difficult to convince Texas lawmakers to embrace "sensible policies."

The group launched last year and counts Coinbase and VC firm Andreessen Horowitz's a16z crypto fund as members.

CFAT and Lejilex argue the Securities and Exchange Commission is wrong to classify digital assets as "investment contracts" as they create no ongoing commitment between creator and purchaser.

They also asked the court to apply the "major questions" doctrine, which lets judges invalidate executive agency actions of "vast economic and political significance" unless Congress clearly authorised them.

Disclaimer:

The opinions expressed by our writers are their own and do not represent the views of UK Investment Guides. The information provided on UK Investment Guides is intended for informational purposes only. UK Investment Guides is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

Share this post with friends!