The lawsuit marks a significant development in the ongoing legal tussle between the SEC and cryptocurrency firms, as Lejilex and CFAT seek to challenge the regulatory framework that the SEC has sought to impose on the rapidly evolving digital asset landscape.
Lejilex, Crypto Freedom Alliance of Texas Challenge SEC’s Authority on Cryptocurrency Regulation. Image Source: Canva
Fort Worth-based Lejilex, a prominent cryptocurrency company, along with the Crypto Freedom Alliance of Texas (CFAT), filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), alleging regulatory overreach and seeking a judicial declaration that digital assets traded on exchanges are not securities. The legal action contends that the SEC’s jurisdiction over the cryptocurrency industry lacks a clear statutory mandate.
According to a report on Reuters, Lejilex, which aspires to launch its cryptocurrency platform called Legit.Exchange, was established last year and plans to list digital assets, including those previously categorized as securities by the SEC in lawsuits against major players such as Coinbase, the largest U.S. cryptocurrency exchange, and Binance, the world’s largest crypto exchange. The company is urging the court to rule that listing pre-existing tokens does not violate securities laws, a move that aligns with similar denials from Coinbase and Binance against the SEC’s allegations.
This lawsuit marks a significant development in the ongoing legal tussle between the SEC and cryptocurrency firms, as Lejilex and CFAT seek to challenge the regulatory framework that the SEC has sought to impose on the rapidly evolving digital asset landscape, Reuters reported.
Both Lejilex and CFAT assert that the SEC’s classification of digital assets as “investment contracts” is misguided, emphasizing that these assets do not establish an ongoing commitment between creators and purchasers. The legal battle mirrors similar arguments put forth by other cryptocurrency companies, including Coinbase and Binance, challenging SEC enforcement actions, which have, thus far, faced resistance in the courts.
