Texas Crypto Company and CFAT Challenge SEC’s Regulatory Authority
A Texas-based crypto company, Lejilex, along with the Crypto Freedom Alliance of Texas (CFAT), has filed a lawsuit against the US Securities and Exchange Commission (SEC), alleging ‘regulatory overreach’ and seeking clarity on the classification of digital assets.
The lawsuit contends that the SEC’s jurisdiction over the cryptocurrency industry lacks a clear statutory mandate, leading to concerns about excessive regulation and its impact on innovation within the sector.
Lejilex Seeks Legal Clarification
Lejilex aims to operate Legit.Exchange, a crypto platform, and asserts that the SEC’s assertion of jurisdiction has created uncertainty for the company to list digital assets, including those previously classified as securities by the SEC in legal actions against prominent exchanges such as Binance and Coinbase.
The company is seeking legal clarification to ensure that listing pre-existing tokens does not violate securities laws, highlighting the challenges faced by crypto startups in navigating regulatory compliance.
CFAT Joins Lawsuit for Sensible Policies
The Crypto Freedom Alliance of Texas (CFAT), a lobbying group representing industry interests, has joined the lawsuit. They cite difficulties in advocating for sensible policies in Texas due to the SEC’s broad oversight of digital assets.
The group includes prominent members such as Coinbase and Andreessen Horowitz’s a16z crypto fund. Their aim is to block potential SEC enforcement actions against its members and advocate for a more conducive regulatory environment for the cryptocurrency industry.
Contesting the SEC’s Regulatory Approach
Lejilex and CFAT contest that the SEC’s characterization of digital assets as investment contracts overlooks the absence of a continuous commitment between creators and buyers.
They are pursuing legal action to challenge the SEC’s regulatory approach and advocate for the application of the major questions doctrine. This doctrine enables judges to nullify agency actions that have substantial economic and political implications without explicit authorization from Congress.
Crypto Community Voices Concerns Over SEC Leadership
The negative comments regarding the US SEC are not limited to Lejilex and CFAT. Seasoned trader Peter Brandt has publicly criticized SEC Chairman Gensler, citing Gensler’s track record of neglecting investor interests.
Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, has also condemned the SEC’s approach under Gensler’s leadership, alleging misuse of authority by Gensler and Enforcement Director Gurbir Grewal.
Hot Take: Crypto Companies Challenge SEC’s Authority in Lawsuit
A Texas-based crypto company, Lejilex, and the Crypto Freedom Alliance of Texas (CFAT) have filed a lawsuit against the US Securities and Exchange Commission (SEC), claiming regulatory overreach and seeking clarity on the classification of digital assets. The lawsuit raises concerns about excessive regulation and its impact on innovation within the cryptocurrency industry. Lejilex aims to operate Legit.Exchange, but uncertainty caused by the SEC’s jurisdiction has hindered the listing of digital assets. CFAT has joined the lawsuit to advocate for sensible policies in Texas amidst the SEC’s broad oversight. Lejilex and CFAT contest the SEC’s characterization of digital assets as investment contracts, arguing for a more conducive regulatory environment. The crypto community has also voiced concerns over SEC leadership under Chairman Gensler, citing neglect of investor interests and misuse of authority.
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