The US SEC is being sued by a new crypto exchange along with the Crypto Freedom alliance of Texas (CFAT), aiming to redefine the regulatory landscape for digital assets.
Allegations Of Regulatory Overreach
LEJILEX, a Fort Worth-based crypto company, alongside the Crypto Freedom Alliance of Texas, has taken the SEC to court, alleging that the securities regulator has exceeded its authority in asserting jurisdiction over the crypto industry. The lawsuits, filed in federal court in Fort Worth, seek clarity on whether digital assets traded on exchanges should be classified as securities.
At the heart of the legal dispute lies the SEC’s recent enforcement actions, which the plaintiffs argue have created uncertainty and hindered the establishment of sensible regulatory policies in Texas. LEJILEX’s intention to launch Legit.Exchange, a cryptocurrency platform planning to list digital assets previously categorized as securities by the SEC, underscores the urgency of the matter.
Lawsuits Aim To Redefine Regulatory Landscape For Digital Assets
Central to the legal strategy is the invocation of the “major questions” doctrine, a judicial tool that allows courts to invalidate executive agency actions unless explicitly authorized by Congress. By questioning the SEC’s authority to classify digital assets as securities and pressing for clear statutory mandates, LEJILEX and CFAT aim to establish a precedent that could reshape the regulatory framework for the entire digital asset industry.
The choice of venue, the 5th US Circuit Court of Appeals, known for its conservative-leaning judges, adds a strategic dimension to the legal battle. With more than two-thirds of the court’s judges appointed by Republican presidents, the plaintiffs see an opportunity to challenge SEC actions under the Biden administration.
As the legal proceedings unfold, stakeholders across the industry will keenly watch the courtroom drama unfold, anticipating a potential reshaping of the regulatory landscape for digital assets in the United States.
