A Texas-based cryptocurrency company, Lejilex, in
conjunction with the Crypto Freedom Alliance of Texas (CFAT), launched a legal
challenge against the US Securities and Exchange Commission (SEC) on Wednesday.
The lawsuit, filed in federal court in Fort Worth, asserts that the SEC has
exceeded its regulatory boundaries by asserting jurisdiction over digital
assets traded on exchanges and deeming them securities.
Lejilex, headquartered in Fort Worth, aims to operate a
cryptocurrency platform known as Legit.Exchange. The company’s formation last
year marked its intention to list digital assets, including those previously
categorized as securities in legal battles against Coinbase and Binance.
“We wish we were launching our business instead of
filing a lawsuit, but here we are,” stated Mike Wawszczak, the Co-Founder
of Lejilex, expressing the company’s reluctance towards litigation.
The lawsuit alleges that the SEC lacks a “clear
statutory mandate” to oversee the cryptocurrency industry and seeks
judicial clarification that listing pre-existing tokens on their platform would
not infringe securities laws.
Coinbase and Binance Defend Against SEC Allegations
Both Coinbase
and Binance have
refuted the SEC’s allegations against them. CFAT, which includes prominent
members such as Coinbase and Andreessen Horowitz’s a16z crypto fund, requests
the court to prevent the SEC
from prosecuting its members. The group also argues that the SEC’s intervention
has hindered efforts to persuade Texas lawmakers to adopt favorable policies
regarding digital assets.
LEJILEX and the Crypto Freedom Alliance of Texas filed a lawsuit against the SEC https://t.co/qoxPcxVspA
— Blockworks (@Blockworks_) February 21, 2024
The crux of the lawsuit revolves around the classification
of digital assets as “investment contracts” by the SEC. Lejilex and
CFAT contend that these assets do not establish a lasting commitment between
creators and purchasers, challenging the SEC’s regulatory framework.
Moreover, the plaintiffs urge the court to apply the
“major questions” doctrine, allowing judges to annul executive agency
actions of significant economic and political consequence unless explicitly
authorized by Congress. This legal argument has gained momentum among
regulatory opponents, especially in light of recent decisions by the
conservative-leaning…
