SEC sued over unlawful targeting of crypto industry

The US Securities and Exchange Commission (SEC) has been sued in Texas for “unlawful targeting” digital asset businesses.
The lawsuit was filed in the United States District Court for the Northern District of Texas on Wednesday by crypto startup LEJILEX and Crypto Freedom Alliance of Texas
LEJILEX is filing the lawsuit ahead of its plans to launch a digital assets exchange.

Texas-based non-profit platforms LEJILEX and Crypto Freedom Alliance of Texas (CFAT), have filed a lawsuit against the US Securities and Exchange Commission (SEC), arguing that the regulator has over the past few years overreached in its regulatory approach to the crypto industry.

SEC sued for regulatory “overreach”

A complaint filed in the United States District Court for the Northern District of Texas alleges that the SEC has “unlawful” asserted its regulatory authority all over the crypto space across Texas and the United States.

“This case, filed in anticipation of CFAT member company LEJILEX launching a new digital asset trading platform, seeks confirmation that transactions in digital assets on this platform are not sales of securities that are subject to SEC registration requirements,” the platforms noted in a press release published on Wednesday.

CFAT and LEJILEX hope that their lawsuit will help highlight and end SEC’s misguided policy, which they say actively harms law-abiding American businesses.

“We wish we were launching our business instead of filing a lawsuit, but here we are,” Mike Wawszczak, co-founder of LEJILEX, said.

The SEC has over the years come under heavy criticism from the crypto sector and US lawmakers, many pointing out the agency’s rogue approach to the issue of crypto regulation. The watchdog has charged several crypto businesses with alleged offering of unregistered securities.

Although they have lost some high-profile lawsuits such as that against Ripple when a judge declared XRP not a security, the overall picture is that there’s no regulatory clarity yet.

Crypto exchanges the SEC has charged include Coinbase, Binance, Kraken and Bittrex.