Written by Jody Godoy
(Reuters) – A Texas cryptocurrency company and industry group told the U.S. Securities and Exchange Commission on Wednesday that digital assets traded on exchanges are not securities, saying it exceeded the regulator's authority. asked the judge for a ruling.
Fort Worth-based cryptocurrency company Lejilex and the lobbying group Crypto Freedom Alliance of Texas (CFAT) argue that the SEC asserted jurisdiction over the industry without a “clear legal mandate.”
Lejilex says it aims to operate a cryptocurrency platform called Legit.Exchange. The company, founded last year, says it plans to list digital assets, including what the SEC deemed securities in its lawsuit against Coinbase, the largest U.S. cryptocurrency exchange, and Binance, the world's largest cryptocurrency exchange. Stated.
Lejilex wants the court to rule that the listing of existing tokens does not violate securities laws.
Both Coinbase and Binance deny the SEC's allegations.
CFAT asks court to prevent SEC from suing members, persuades Texas lawmakers to adopt 'sensible policy' as SEC asserts jurisdiction over digital assets He said that it has become difficult.
The group was launched last year and counts Coinbase and venture capital firm Andreessen Horowitz's a16z crypto fund as members.
CFAT and Lejilex argue that the SEC is wrong in classifying digital assets as “investment contracts” because digital assets do not create an ongoing commitment between creator and purchaser. There is.
They also asked the court to apply the “grave question” doctrine, which allows judges to invalidate executive branch actions that are “of vital economic and political importance” unless explicitly authorized by Congress.
The once-unusual theory is gaining traction among regulatory opponents after the conservative-leaning U.S. Supreme Court applied it in several recent cases.
Cryptocurrency companies fighting SEC enforcement actions, including Coinbase and Binance, have made similar arguments in other lawsuits, but so far without success.
In July, a judge rejected arguments in the SEC's lawsuit against Ripple Labs that securitizing assets requires an ongoing commitment. Another judge overseeing the regulator's case against Terraform Labs has ruled that the “serious questions” doctrine does not apply to the crypto industry. Both of these cases were filed in New York.
A new lawsuit filed in federal court in Fort Worth places the fight between the industry and regulators under the jurisdiction of the 5th U.S. Circuit Court of Appeals. More than two-thirds of the Court of Appeals judges were appointed by Republican presidents, making it a popular venue for challenges to the SEC under the Biden administration.
(Reporting by Jody Godoy in New York; Editing by Andrea Ricci)
