The feud between the crypto market and the US Securities & Exchange Commission takes a new turn. Crypto Freedom Alliance of Texas (CFAT) and LEJILEX have filed a lawsuit to seek validity and clarification about the Commission’s jurisdiction over digital assets. Needless to say, it expands to the entire market, with players eager to know how many digital assets actually qualify for securities.
Their lawsuit originates from the foundation of an enterprise that might be worth a trillion US dollars. The complaint was filed in the US District Court for the Northern District of Texas. Clement & Murphy, PLLC and Duane Morris, LLP represent it. The lawsuit highlights that the SEC has assumed jurisdiction over all digital assets despite many commissioners acknowledging that Congress never granted authority to the agency to do so.
LEJILEX and CFAT cited that the Commission lacks regulatory authority over most of the digital asset transactions, adding that it has yet to show respect to the limits put by Congress on its jurisdiction. Conversely, the SEC continues to pursue actions against the market, saying that they represent investment contracts.
What empowers players to take a stand against the Commission is the uncertain definition of digital assets and their classification as security. There is a prevailing belief that the Commission is practically chasing every possible digital asset that exists in the market. LEJILEX has backed its new platform on the principle that digital assets on its platforms are not securities.
Assuming the verdict comes in the favor of the agency, it would gain limitless authority over the market. This includes transactions like buying and selling digital assets in Texas and other parts of the US.
Mike Wawszczak, the co-founder of LEJILEX, said they wish they were launching their business instead of filing a lawsuit. Mike has defined the enforcement actions of the SEC as rogue, stating that they have practically paralyzed many developers who are in the industry just to build lawful technologies and businesses. They hope their actions will encourage relevant authorities to reconsider their stance, enabling them to work for a better future for technology.
The US SEC often states that its actions are justified, for they are responsible for protecting investors and traders. Both sides have valid arguments that can be better resolved with cooperation. However, it would be up to the court to take a call and give the industry and the SEC’s actions a direction.
That said, the two dominant cryptos on the market are performing decently. BTC is up by 0.78% and ETH has grown by 2.18% in the last 24 hours, at the time of drafting this article. ETH surpassed the $3k for a few moments before dropping below the margin. BTC has continued to rally below $52,000 since the opening of February 21, 2024.