Crypto.com receives Wells notification
Crypto.com, a world-renowned cryptocurrency exchange, confirmed yesterday (October 8) that it had received a Wells notice from the U.S. Securities and Exchange Commission (SEC). The Wells notice mainly focused on whether it violated securities laws. After conducting investigations, most of the cryptocurrency exchanges that received Wells notices in the past were subsequently prosecuted by the SEC.
In response, Crypto.com launched a strong counterattack. According to an official statement, the exchange had announced a lawsuit against the SEC shortly after receiving the Wells notice, accusing it of over-regulating the cryptocurrency industry and exceeding the requirements without legal authorization. its due scope of supervision.
Crypto.com’s position and background
Crypto.com said in a statement that since its establishment in 2016, the exchange has been committed to complying with U.S. regulatory requirements. It is not only registered as a money services enterprise with the U.S. Financial Crimes Enforcement Network (FinCEN), but also has currency transfers in more than 40 states across the United States. license, and has obtained more than 100 global regulatory approvals
At the same time, its subsidiary Crypto.com | Derivatives Corporation of North America (CDNA) is also registered with the CFTC as a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO).
Angrily suing the SEC: Excessive regulation hinders development
According to Crypto.com, the SEC’s regulatory approach has deviated from the scope of legal authorization. The unilateral expansion of jurisdiction is contrary to the current legal system, especially in the United States, where the SEC treats almost all crypto asset transactions as securities. trade.
Crypto.com argued that the SEC’s actions never followed the notice and public comment period required by the Administrative Procedure Act and were instead applied to the market in a haphazard and capricious manner.
Crypto.com specifically pointed out that the characteristics of many crypto assets are very similar to Bitcoin ($BTC) and Ethereum ($ETH), but they are unfairly regarded as securities in the eyes of the SEC. Crypto.com hopes to use legal means to Stop this illegal behavior and ensure that the cryptocurrency industry can develop stably within the legal framework of the United States.
Joint Interpretation Petition Against CFTC
In addition to the litigation action, Crypto.com subsidiary Crypto.com | Derivatives North America (CDNA) also filed a joint interpretation petition with the U.S. Commodity Futures Trading Commission (CFTC) and SEC.
Under the (Dodd-Frank Act), the Joint Interpretation Rule allows petition sponsors to ask whether specific products are "swaps" or "security swaps" and whether they may involve hybrid forms of swaps, the purpose of which CDNA initiated the petition , is to confirm that certain cryptocurrency derivatives should be regulated by the CFTC rather than decided by the SEC alone.
The two regulators have 120 days to issue a jointly approved explanation or decide whether to reject it after seeking public comment.