Crypto.com sees ‘strong legal footing’ in crypto rulings against SEC

Crypto.com, a cryptocurrency exchange and service provider, has cited recent court rulings against the United States Securities and Exchange Commission (SEC) as potentially aiding its legal battle with the regulator.

The company claims that the SEC’s action exemplifies “unauthorized and unjust regulation,” even as the next US presidential administration may take a “more constructive and effective approach” to cryptocurrency.

Legal rulings offer hope

The cryptocurrency industry has seen significant legal victories over the SEC in recent years, setting important precedents for companies like Crypto.com.

“US Courts have provided the crypto industry much-needed relief from the SEC’s enforcement by regulation overreach by confirming what we’ve known all along — that crypto is not itself a security,” Crypto.com’s chief legal officer Nick Lundgren told Cointelegraph on Oct. 17.

He added: 

“These rulings against the SEC put us on strong legal footing to prevail in our suit. We trust the US Judicial Branch will ultimately provide the regulatory certainty the SEC has failed to deliver.”

Wells notice doesn’t halt US operations

By definition, the SEC’s Wells notice is a communication informing a company that the regulator has concluded that they should be charged with violating securities laws.

Crypto.com’s receipt of a Wells notice does not mean that the company should halt operations in the US.

“Wells notice is not a final determination that prevents a defendant from continuing its business,” Michael Gold, partner at Securities, Regulatory and Transactional group, told Cointelegraph.

He mentioned that the recipient has the opportunity to respond to the Wells notice with a Wells Submission containing its arguments about why the charges should not be brought against the target. Gold added:

“In essence, they are taking the position that what they are doing is lawful and they are going to continue to do it. If they win in court, no harm no foul.”

Crypto.com’s US presence

It’s unclear which Crypto.com products and services are currently available to either retail or institutional clients in the US.

“We’ll continue to evaluate the steps required to offer our services in New York (our goal) and will provide updates when and if the status in this restricted state changes,” the website reads.