Crypto.com has sued the U.S. Securities and Exchange Commission (SEC), accusing it of overstepping its authority by regulating the sale of unregistered tokens. The Singapore-based crypto exchange operator received a so-called Wells Notice on Tuesday, threatening imminent litigation from the SEC, and is now responding with legal action to protect the future of the crypto industry in the U.S.

The SEC is currently the focus of many major crypto companies like Coinbase, Kraken, Binance, and Gemini, which are being investigated for alleged violations of US securities laws concerning unregistered securities. Crypto.com joins this list and argues that the SEC has no legal basis to regulate certain token sales. "The unauthorized overreach and unlawful rule-making by the SEC in the crypto sector must be stopped," stated Kris Marszalek, CEO of Crypto.com, in the complaint.

Unlike Bitcoin and Ether, which are considered established cryptocurrencies by Crypto.com, the company sells so-called network tokens like Solana, Cardano, and Binance's BNB. Crypto.com claims that these tokens do not fall under the SEC's jurisdiction and therefore should not be regulated as securities. "The SEC has no jurisdiction over these sales and cannot legally regulate them," the lawsuit against the SEC, its Chairman Gary Gensler, and the four other SEC commissioners states.

This legal dispute reflects the growing tension between the crypto industry and regulators. Many executives and investors in the crypto space criticize the SEC for "regulation through enforcement" and publicly support Donald Trump's presidential campaign, hoping for more crypto-friendly policies. Trump has announced plans to remove Gary Gensler as SEC chief and stop the "persecution" of the crypto sector.

Alongside the lawsuit, Crypto.com has also filed a petition with the SEC and the Commodity Futures Trading Commission (CFTC) to have certain crypto derivatives regulated exclusively by the CFTC. This initiative aims to more clearly define regulatory responsibilities and facilitate the operation of crypto companies.

Since its founding in 2016, Crypto.com has offered trading with over 350 digital assets as well as a prepaid Visa card. The company focuses on retail customers and has sponsored numerous entertainment events, including the Champions League and Formula 1. Despite challenges from the SEC's regulatory actions, Crypto.com remains optimistic and emphasizes its plans to further expand its offerings for US customers.