The Digital Chamber Issues Statement After Crypto.com Files Lawsuit Against SEC: “Regulatory Overreach”

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Julia Smith

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Julia Smith

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Julia is an experienced editor with a passion for covering a wide variety of beats. She loves all things politics and regularly covers regulatory updates on emerging technology here for Crypto News.

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Last updated:

October 8, 2024 15:00 EDT

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Digital asset advocacy group The Digital Chamber is backing Crypto.com after its CEO Kris Marszalek announced the company would sue the United States Securities and Exchange Commission (SEC) upon receiving a Wells Notice.

Kris Marszalek’s Crypto.com Files Lawsuit Post SEC Wells Notice

According to the new statement, the Digital Chamber “fully supports” Crypto.com‘s legal action against the SEC.

“This lawsuit is a necessary step toward achieving the regulatory clarity that the crypto industry needs to thrive in the United States,” The Digital Chamber notes. “Crypto.com’s case highlights the challenges that arise when the SEC bypasses the formal rulemaking process, instead opting for enforcement actions that create uncertainty and hinder innovation.”

Long criticized for its enforcement-heavy approach to digital asset regulation, the SEC apparently sent the Marszalek-run platform a Wells Notice on August 22, warning the crypto company of an upcoming enforcement action against it.

According to Crypto.com’s filing, the SEC has investigated the digital asset organization since February 2023 for potentially violating U.S. securities.

Marszalek announced his decision to sue the federal regulator on October 8 in an X post, declaring that the SEC’s “unauthorized overreach and unlawful rulemaking regarding crypto must stop.”

“While we welcome recent bipartisan support for the industry, that message has not been received by current SEC leadership that issued us a Wells notice,” Marszalek wrote. “The SEC’s unauthorized overreach and unlawful rulemaking regarding crypto must stop.”

The Digital Chamber Takes Action

The lawsuit, which claims the federal agency regulates crypto through “aggressive litigation in a way that’s not efficient or fair,” marks the latest crypto venture battling the SEC following challenges from Binance and Coinbase, among others.

The Digital Chamber has largely backed key players in the blockchain sector. In November 2023, following the agency’s lawsuit against crypto exchange Kraken, the Chamber called on Congress to prevent SEC overreach and condemned the regulator for issuing a Wells Notice to Robinhood Crypto this past May.

“We believe that clear and fair rules are essential for innovation, not regulatory overreach through enforcement,” the crypto advocacy group continued. “We stand with Crypto.com as they pursue this important matter in the U.S. courts, confident that it will reaffirm the importance of due process in the regulatory landscape.”