Texas crypto industry representatives accuse the SEC of exceeding its authority

Lejilex believes that the SEC is going after crypto companies without any legal clarification

22.02.2024 - 14:32

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3 min

What’s new? Texas-based mining company Lejilex and lobbying group Crypto Freedom Alliance of Texas (CFAT) have filed a lawsuit against the US Securities and Exchange Commission (SEC). The crypto industry representatives said the regulator exceeded its authority and urged the judge to rule that digital assets traded on exchanges are not securities, Reuters reports.

Material by Reuters

What else is known? Lejilex believes that the SEC is pursuing crypto companies without any legal clarification because there is no clear regulation in the United States. In addition, the company is going to create a crypto exchange and list tokens, including those that the regulator called securities as part of lawsuits against the Coinbase and Binance platforms. Lejilex is asking the court to rule that offering these assets would not violate securities laws.

CFAT urged the court to bar the SEC from suing the group’s members and said the agency’s assertion of jurisdiction over digital assets made it difficult to persuade Texas lawmakers to adopt “sensible policies.”

The group was created in 2023 and its members include Coinbase and Andreessen Horowitz’s a16z crypto venture capital fund.

CFAT and Lejilex argue that the SEC is wrong to classify digital assets as “investment contracts” because they do not create permanent obligations between the seller and buyer.

They also asked for the application of the “major questions” doctrine, which allows judges to invalidate executive actions of “vast economic and political significance” if Congress has not explicitly authorized them.

SEC files record number of lawsuits against crypto companies in 2023

Compared to last year, the figure is up by 53%

The SEC previously reached a settlement with Brian Sewell, founder of Rockwell Capital Management and online course provider American Bitcoin Academy, whom it had previously charged with $1,2 million in fraud. Rockwell agreed to pay $1,6 million in compensation and Sewell agreed to pay a $223 229 fine, while neither admitting nor denying the allegations in the lawsuit.

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