A Texas Crypto Firm and Industry Group Sue the SEC Over Authority on Exchange-Traded Crypto
A Texas-based crypto mining firm called Lejilex and the Crypto Freedom Alliance of Texas (CFAT) have filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), disputing the regulatory body’s authority over exchange-traded cryptocurrencies. The firms argue that the SEC lacks a clear legal mandate in the crypto domain.
Lejilex plans to launch Legit.Exchange, a crypto trading platform, which aims to list tokens that have been classified as securities by the SEC. The firm is taking legal action against Coinbase and Binance, who have faced similar lawsuits from the SEC.
According to Lejilex co-founder Mike Wawszczak, the company would have preferred to launch its business without resorting to legal action. However, they believe it is necessary to challenge the SEC’s classification of cryptocurrencies as investment contracts.
The Lawsuit Challenges SEC’s Classification of Cryptocurrencies
- Lejilex and CFAT dispute the SEC’s classification of cryptocurrencies as investment contracts.
- They argue that cryptocurrencies lack the ongoing commitments typically associated with securities.
- In June 2023, the SEC sued Coinbase and Binance, claiming that several tokens listed on their platforms were securities.
- Binance denied the allegations, suggesting that the SEC was attempting to assert judicial power over other regulatory bodies.
The Motivation Behind Lejilex’s Legal Action
- Lejilex aims to establish Legit.Exchange, a crypto trading platform.
- The firm intends to list tokens previously designated as securities by the SEC.
- Lejilex co-founder expressed regret at resorting to legal action but believes it is necessary to challenge the SEC’s authority.
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