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April 12, 2024
Regulatory News

SEC sued over crypto regulation authority

Gary Gensler SEC Coinbase

U.S. Securities and Trade Fee Chairman Gary Gensler. Picture: Kevin Dietsch/Getty Pictures

Lejilex, a digital asset firm, together with the Crypto Freedom Alliance of Texas (CFAT), has filed a lawsuit in opposition to the U.S. Securities and Trade Fee (SEC) in a Texas court docket, difficult the SEC’s authority to control digital belongings.

The go well with, filed on Feb. 21, contends that the SEC has overstepped its jurisdiction by treating practically all digital asset transactions as funding contracts beneath federal securities legal guidelines.

The lawsuit argues that the SEC has not been granted specific authority by Congress to control digital belongings and that the company’s enforcement actions have been primarily based on an excessively broad interpretation of its powers.

Lejilex, which plans to launch a brand new digital asset buying and selling platform known as Legit.Trade, fears potential SEC enforcement actions primarily based on the regulator’s latest stance. CFAT, advocating for accountable crypto coverage improvement in Texas, claims the SEC’s present method hinders different authorities from correctly regulating digital belongings.

The grievance, spanning 57 pages, criticizes the SEC for not proposing any rules for public remark that might make clear its regulatory area over digital belongings.

The plaintiffs are in search of a court docket ruling to verify that secondary-market gross sales of digital belongings facilitated by Legit.Trade doesn’t represent securities gross sales. Additionally they need the court docket to declare that Legit.Trade won’t function as an unregistered securities trade, dealer, or clearing company.

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